City of Manila vs Laguio, Jr. 455SCRA 308 (2005) DECISION TINGA, J.

: I know only that what is moral is what you feel good after and what is immoral is what you feel bad after. Ernest Hermingway Death in the Afternoon, Ch. 1 It is a moral and political axiom that any dishonorable act, if performed by oneself, is less immoral than if performed by someone else, who would be well-intentioned in his dishonesty. J. Christopher Gerald Bonaparte in Egypt, Ch. I The Court's commitment to the protection of morals is secondary to its fealty to the fundamental law of the land. It is foremost a guardian of the Constitution but not the conscience of individuals. And if it need be, the Court will not hesitate to "make the hammer fall, and heavily" in the words of Justice Laurel, and uphold the constitutional guarantees when faced with laws that, though not lacking in zeal to promote morality, nevertheless fail to pass the test of constitutionality. The pivotal issue in this Petition1 under Rule 45 (then Rule 42) of the Revised Rules on Civil Procedure seeking the reversal of the Decision2 in Civil Case No. 93-66511 of the Regional Trial Court (RTC) of Manila, Branch 18 (lower court),3 is the validity of Ordinance No. 7783 (the Ordinance) of the City of Manila.4 The antecedents are as follows: Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business of operating hotels, motels, hostels and lodging houses.5 It built and opened Victoria Court in Malate which was licensed as a motel although duly accredited with the Department of Tourism as a hotel.6 On 28 June 1993, MTDC filed a Petition for Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order7 (RTC Petition) with the lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional.8 Enacted by the City Council9 on 9 March 1993 and approved by petitioner City Mayor on 30 March 1993, the said Ordinance is entitled AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR OTHER PURPOSES.10 The Ordinance is reproduced in full, hereunder: SECTION 1. Any provision of existing laws and ordinances to the contrary notwithstanding, no person, partnership, corporation or entity shall, in the Ermita-Malate area bounded by Teodoro M. Kalaw Sr. Street in the North, Taft Avenue in the East, Vito Cruz Street in the South and Roxas Boulevard in the West, pursuant to P.D. 499 be allowed or authorized to contract and engage in, any business providing certain forms of amusement, entertainment, services and facilities where women are used as tools in entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the community, such as but not limited to: 1. Sauna Parlors 2. Massage Parlors 3. Karaoke Bars

4. Beerhouses 5. Night Clubs 6. Day Clubs 7. Super Clubs 8. Discotheques 9. Cabarets 10. Dance Halls 11. Motels 12. Inns SEC. 2 The City Mayor, the City Treasurer or any person acting in behalf of the said officials are prohibited from issuing permits, temporary or otherwise, or from granting licenses and accepting payments for the operation of business enumerated in the preceding section. SEC. 3. Owners and/or operator of establishments engaged in, or devoted to, the businesses enumerated in Section 1 hereof are hereby given three (3) months from the date of approval of this ordinance within which to wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area, such as but not limited to: 1. Curio or antique shop 2. Souvenir Shops 3. Handicrafts display centers 4. Art galleries 5. Records and music shops 6. Restaurants 7. Coffee shops 8. Flower shops 9. Music lounge and sing-along restaurants, with well-defined activities for wholesome family entertainment that cater to both local and foreign clientele. 10. Theaters engaged in the exhibition, not only of motion pictures but also of cultural shows, stage and theatrical plays, art exhibitions, concerts and the like. 11. Businesses allowable within the law and medium intensity districts as provided for in the zoning ordinances for Metropolitan Manila, except new warehouse or open-storage depot, dock or yard, motor repair shop, gasoline service station, light industry with any machinery, or funeral establishments. SEC. 4. Any person violating any provisions of this ordinance, shall upon conviction, be punished by imprisonment of one (1) year or fine of FIVE THOUSAND (P5,000.00) PESOS, or both, at the discretion of the Court, PROVIDED, that in case of juridical person, the President, the General Manager, or person-in-charge of operation shall be liable thereof; PROVIDED FURTHER, that in case of subsequent violation and conviction, the premises of the erring establishment shall be closed and padlocked permanently. SEC. 5. This ordinance shall take effect upon approval. Enacted by the City Council of Manila at its regular session today, March 9, 1993. Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied) In the RTC Petition, MTDC argued that the Ordinance erroneously and improperly included in its enumeration of prohibited establishments, motels and inns such as MTDC's Victoria Court considering that these were not establishments for "amusement" or "entertainment" and they were not "services or facilities for entertainment," nor did they use women as "tools for entertainment," and neither did they "disturb the community," "annoy the inhabitants" or "adversely affect the social and moral welfare of the community."11 MTDC further advanced that the Ordinance was invalid and unconstitutional for the following reasons: (1) The City Council has no power to prohibit the operation of motels as Section 458 (a) 4 (iv)12 of the Local Government Code of 1991 (the Code)

grants to the City Council only the power to regulate the establishment, operation and maintenance of hotels, motels, inns, pension houses, lodging houses and other similar establishments; (2) The Ordinance is void as it is violative of Presidential Decree (P.D.) No. 49913 which specifically declared portions of the Ermita-Malate area as a commercial zone with certain restrictions; (3) The Ordinance does not constitute a proper exercise of police power as the compulsory closure of the motel business has no reasonable relation to the legitimate municipal interests sought to be protected; (4) The Ordinance constitutes an ex post facto law by punishing the operation of Victoria Court which was a legitimate business prior to its enactment; (5) The Ordinance violates MTDC's constitutional rights in that: (a) it is confiscatory and constitutes an invasion of plaintiff's property rights; (b) the City Council has no power to find as a fact that a particular thing is a nuisance per se nor does it have the power to extrajudicially destroy it; and (6) The Ordinance constitutes a denial of equal protection under the law as no reasonable basis exists for prohibiting the operation of motels and inns, but not pension houses, hotels, lodging houses or other similar establishments, and for prohibiting said business in the Ermita-Malate area but not outside of this area.14 In their Answer15 dated 23 July 1993, petitioners City of Manila and Lim maintained that the City Council had the power to "prohibit certain forms of entertainment in order to protect the social and moral welfare of the community" as provided for in Section 458 (a) 4 (vii) of the Local Government Code,16 which reads, thus: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: ....

chapter; and to fix penalties for the violation of ordinances which shall not exceed two hundred pesos fine or six months' imprisonment, or both such fine and imprisonment, for a single offense. Further, the petitioners noted, the Ordinance had the presumption of validity; hence, private respondent had the burden to prove its illegality or unconstitutionality.21 Petitioners also maintained that there was no inconsistency between P.D. 499 and the Ordinance as the latter simply disauthorized certain forms of businesses and allowed the Ermita-Malate area to remain a commercial zone.22 The Ordinance, the petitioners likewise claimed, cannot be assailed as ex post facto as it was prospective in operation.23 The Ordinance also did not infringe the equal protection clause and cannot be denounced as class legislation as there existed substantial and real differences between the Ermita-Malate area and other places in the City of Manila.24 On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued an ex-parte temporary restraining order against the enforcement of the Ordinance.25 And on 16 July 1993, again in an intrepid gesture, he granted the writ of preliminary injunction prayed for by MTDC.26 After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision, enjoining the petitioners from implementing the Ordinance. The dispositive portion of said Decision reads:27 WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of 1993, of the City of Manila null and void, and making permanent the writ of preliminary injunction that had been issued by this Court against the defendant. No costs. SO ORDERED.28

(4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: .... (vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community. Citing Kwong Sing v. City of Manila,17 petitioners insisted that the power of regulation spoken of in the above-quoted provision included the power to control, to govern and to restrain places of exhibition and amusement.18 Petitioners likewise asserted that the Ordinance was enacted by the City Council of Manila to protect the social and moral welfare of the community in conjunction with its police power as found in Article III, Section 18(kk) of Republic Act No. 409,19 otherwise known as the Revised Charter of the City of Manila (Revised Charter of Manila)20 which reads, thus: ARTICLE III THE MUNICIPAL BOARD . . . Section 18. Legislative powers. The Municipal Board shall have the following legislative powers: . . . (kk) To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity, and the promotion of the morality, peace, good order, comfort, convenience, and general welfare of the city and its inhabitants, and such others as may be necessary to carry into effect and discharge the powers and duties conferred by this

Petitioners filed with the lower court a Notice of Appeal29 on 12 December 1994, manifesting that they are elevating the case to this Court under then Rule 42 on pure questions of law.30 On 11 January 1995, petitioners filed the present Petition, alleging that the following errors were committed by the lower court in its ruling: (1) It erred in concluding that the subject ordinance is ultra vires, or otherwise, unfair, unreasonable and oppressive exercise of police power; (2) It erred in holding that the questioned Ordinance contravenes P.D. 49931 which allows operators of all kinds of commercial establishments, except those specified therein; and (3) It erred in declaring the Ordinance void and unconstitutional.32 In the Petition and in its Memorandum,33 petitioners in essence repeat the assertions they made before the lower court. They contend that the assailed Ordinance was enacted in the exercise of the inherent and plenary power of the State and the general welfare clause exercised by local government units provided for in Art. 3, Sec. 18 (kk) of the Revised Charter of Manila and conjunctively, Section 458 (a) 4 (vii) of the Code.34 They allege that the Ordinance is a valid exercise of police power; it does not contravene P.D. 499; and that it enjoys the presumption of validity.35 In its Memorandum36 dated 27 May 1996, private respondent maintains that the Ordinance is ultra vires and that it is void for being repugnant to the general law. It reiterates that the questioned Ordinance is not a valid exercise of police power; that it is violative of due process, confiscatory and amounts to an arbitrary interference with its lawful business; that it is violative of the equal protection clause; and that it confers on petitioner City Mayor or any officer unregulated discretion in the execution of the Ordinance absent rules to guide and control his actions. This is an opportune time to express the Court's deep sentiment and tenderness for the Ermita-Malate area being its home for several decades. A long-time resident, the Court witnessed the area's many turn of events. It relished its glory days and endured its days of infamy. Much as the Court harks back to the resplendent era of the Old Manila and yearns to restore its lost grandeur, it believes that the Ordinance is not the fitting means to that end. The Court is of the opinion, and so holds, that the lower court did not err in declaring the Ordinance, as it did, ultra vires and therefore null and void. The Ordinance is so replete with constitutional infirmities that almost every sentence thereof violates a constitutional provision. The prohibitions and sanctions therein transgress the cardinal rights of persons enshrined by the Constitution. The Court is called upon to shelter these rights from attempts at rendering them worthless.

The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it must not only be within the corporate powers of the local government unit to enact and must be passed according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.37 Anent the first criterion, ordinances shall only be valid when they are not contrary to the Constitution and to the laws.38 The Ordinance must satisfy two requirements: it must pass muster under the test of constitutionality and the test of consistency with the prevailing laws. That ordinances should be constitutional uphold the principle of the supremacy of the Constitution. The requirement that the enactment must not violate existing law gives stress to the precept that local government units are able to legislate only by virtue of their derivative legislative power, a delegation of legislative power from the national legislature. The delegate cannot be superior to the principal or exercise powers higher than those of the latter.39 This relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. The national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.40 The Ordinance was passed by the City Council in the exercise of its police power, an enactment of the City Council acting as agent of Congress. Local government units, as agencies of the State, are endowed with police power in order to effectively accomplish and carry out the declared objects of their creation.41 This delegated police power is found in Section 16 of the Code, known as the general welfare clause, viz: SECTION 16. General Welfare. vernment unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. Local government units exercise police power through their respective legislative bodies; in this case, the sangguniang panlungsod or the city council. The Code empowers the legislative bodies to "enact ordinances, approve resolutions and appropriate funds for the general welfare of the province/city/municipality and its inhabitants pursuant to Section 16 of the Code and in the proper exercise of the corporate powers of the province/city/ municipality provided under the Code.42 The inquiry in this Petition is concerned with the validity of the exercise of such delegated power. The Ordinance contravenes the Constitution The police power of the City Council, however broad and far-reaching, is subordinate to the constitutional limitations thereon; and is subject to the limitation that its exercise must be reasonable and for the public good.43 In the case at bar, the enactment of the Ordinance was an invalid exercise of delegated power as it is unconstitutional and repugnant to general laws. The relevant constitutional provisions are the following: SEC. 5. The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy.44 SEC. 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.45 SEC. 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of laws.46 Sec. 9. Private property shall not be taken for public use without just compensation.47

A. The Ordinance infringes the Due Process Clause The constitutional safeguard of due process is embodied in the fiat "(N)o person shall be deprived of life, liberty or property without due process of law. . . ."48 There is no controlling and precise definition of due process. It furnishes though a standard to which governmental action should conform in order that deprivation of life, liberty or property, in each appropriate case, be valid. This standard is aptly described as a responsiveness to the supremacy of reason, obedience to the dictates of justice,49 and as such it is a limitation upon the exercise of the police power.50 The purpose of the guaranty is to prevent governmental encroachment against the life, liberty and property of individuals; to secure the individual from the arbitrary exercise of the powers of the government, unrestrained by the established principles of private rights and distributive justice; to protect property from confiscation by legislative enactments, from seizure, forfeiture, and destruction without a trial and conviction by the ordinary mode of judicial procedure; and to secure to all persons equal and impartial justice and the benefit of the general law.51 The guaranty serves as a protection against arbitrary regulation, and private corporations and partnerships are "persons" within the scope of the guaranty insofar as their property is concerned.52 This clause has been interpreted as imposing two separate limits on government, usually called "procedural due process" and "substantive due process." Procedural due process, as the phrase implies, refers to the procedures that the government must follow before it deprives a person of life, liberty, or property. Classic procedural due process issues are concerned with what kind of notice and what form of hearing the government must provide when it takes a particular action.53 Substantive due process, as that phrase connotes, asks whether the government has an adequate reason for taking away a person's life, liberty, or property. In other words, substantive due process looks to whether there is a sufficient justification for the government's action.54 Case law in the United States (U.S.) tells us that whether there is such a justification depends very much on the level of scrutiny used.55 For example, if a law is in an area where only rational basis review is applied, substantive due process is met so long as the law is rationally related to a legitimate government purpose. But if it is an area where strict scrutiny is used, such as for protecting fundamental rights, then the government will meet substantive due process only if it can prove that the law is necessary to achieve a compelling government purpose.56 The police power granted to local government units must always be exercised with utmost observance of the rights of the people to due process and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or despotically57 as its exercise is subject to a qualification, limitation or restriction demanded by the respect and regard due to the prescription of the fundamental law, particularly those forming part of the Bill of Rights. Individual rights, it bears emphasis, may be adversely affected only to the extent that may fairly be required by the legitimate demands of public interest or public welfare.58 Due process requires the intrinsic validity of the law in interfering with the rights of the person to his life, liberty and property.59 Requisites for the valid exercise of Police Power are not met To successfully invoke the exercise of police power as the rationale for the enactment of the Ordinance, and to free it from the imputation of constitutional infirmity, not only must it appear that the interests of the public generally, as distinguished from those of a particular class, require an interference with private rights, but the means adopted must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.60 It must be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work. A reasonable relation must exist between the purposes of the police measure and the means employed for its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded.61

Lacking a concurrence of these two requisites, the police measure shall be struck down as an arbitrary intrusion into private rights62 The Ordinance was enacted to address and arrest the social ills purportedly spawned by the establishments in the ErmitaMalate area which are allegedly operated under the deceptive veneer of legitimate, licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses, cocktail lounges, hotels and motels. Petitioners insist that even the Court in the case of ErmitaMalate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila63 had already taken judicial notice of the "alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part to existence of motels, which provide a necessary atmosphere for clandestine entry, presence and exit and thus become the ideal haven for prostitutes and thrill-seekers."64 The object of the Ordinance was, accordingly, the promotion and protection of the social and moral values of the community. Granting for the sake of argument that the objectives of the Ordinance are within the scope of the City Council's police powers, the means employed for the accomplishment thereof were unreasonable and unduly oppressive. It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable regulations looking to the promotion of the moral and social values of the community. However, the worthy aim of fostering public morals and the eradication of the community's social ills can be achieved through means less restrictive of private rights; it can be attained by reasonable restrictions rather than by an absolute prohibition. The closing down and transfer of businesses or their conversion into businesses "allowed" under the Ordinance have no reasonable relation to the accomplishment of its purposes. Otherwise stated, the prohibition of the enumerated establishments will not per se protect and promote the social and moral welfare of the community; it will not in itself eradicate the alluded social ills of prostitution, adultery, fornication nor will it arrest the spread of sexual disease in Manila. Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and establishments of the like which the City Council may lawfully prohibit,65 it is baseless and insupportable to bring within that classification sauna parlors, massage parlors, karaoke bars, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. This is not warranted under the accepted definitions of these terms. The enumerated establishments are lawful pursuits which are not per se offensive to the moral welfare of the community. That these are used as arenas to consummate illicit sexual affairs and as venues to further the illegal prostitution is of no moment. We lay stress on the acrid truth that sexual immorality, being a human frailty, may take place in the most innocent of places that it may even take place in the substitute establishments enumerated under Section 3 of the Ordinance. If the flawed logic of the Ordinance were to be followed, in the remote instance that an immoral sexual act transpires in a church cloister or a court chamber, we would behold the spectacle of the City of Manila ordering the closure of the church or court concerned. Every house, building, park, curb, street or even vehicles for that matter will not be exempt from the prohibition. Simply because there are no "pure" places where there are impure men. Indeed, even the Scripture and the Tradition of Christians churches continually recall the presence and universality of sin in man's history.66 The problem, it needs to be pointed out, is not the establishment, which by its nature cannot be said to be injurious to the health or comfort of the community and which in itself is amoral, but the deplorable human activity that may occur within its premises. While a motel may be used as a venue for immoral sexual activity, it cannot for that reason alone be punished. It cannot be classified as a house of ill-repute or as a nuisance per se on a mere likelihood or a naked assumption. If that were so and if that were allowed, then the Ermita-Malate area would not only be purged of its supposed social ills, it would be extinguished of its soul as well as every human activity, reprehensible or not, in its every nook and cranny would be laid bare to the estimation of the authorities. The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as the Ordinance may to shape morality, it should not foster the illusion that it can make a moral man out of it because immorality is not a thing, a building or establishment; it is in the hearts of men. The City Council instead should regulate human conduct that occurs inside the establishments, but not to the detriment of liberty and privacy which are covenants, premiums and blessings of democracy. While petitioners' earnestness at curbing clearly objectionable social ills is commendable, they unwittingly punish even the proprietors and operators of "wholesome," "innocent" establishments. In the instant case, there is a clear invasion of personal

or property rights, personal in the case of those individuals desirous of owning, operating and patronizing those motels and property in terms of the investments made and the salaries to be paid to those therein employed. If the City of Manila so desires to put an end to prostitution, fornication and other social ills, it can instead impose reasonable regulations such as daily inspections of the establishments for any violation of the conditions of their licenses or permits; it may exercise its authority to suspend or revoke their licenses for these violations;67 and it may even impose increased license fees. In other words, there are other means to reasonably accomplish the desired end. Means employed are constitutionally infirm The Ordinance disallows the operation of sauna parlors, massage parlors, karaoke bars, beerhouses, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns in the Ermita-Malate area. In Section 3 thereof, owners and/or operators of the enumerated establishments are given three (3) months from the date of approval of the Ordinance within which "to wind up business operations or to transfer to any place outside the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area." Further, it states in Section 4 that in cases of subsequent violations of the provisions of the Ordinance, the "premises of the erring establishment shall be closed and padlocked permanently." It is readily apparent that the means employed by the Ordinance for the achievement of its purposes, the governmental interference itself, infringes on the constitutional guarantees of a person's fundamental right to liberty and property. Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist and the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into mere freedom from physical restraint of the person of the citizen, but is deemed to embrace the right of man to enjoy the facilities with which he has been endowed by his Creator, subject only to such restraint as are necessary for the common welfare."68 In accordance with this case, the rights of the citizen to be free to use his faculties in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; and to pursue any avocation are all deemed embraced in the concept of liberty.69 The U.S. Supreme Court in the case of Roth v. Board of Regents,70 sought to clarify the meaning of "liberty." It said: While the Court has not attempted to define with exactness the liberty. . . guaranteed [by the Fifth and Fourteenth Amendments], the term denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognizedas essential to the orderly pursuit of happiness by free men. In a Constitution for a free people, there can be no doubt that the meaning of "liberty" must be broad indeed. In another case, it also confirmed that liberty protected by the due process clause includes personal decisions relating to marriage, procreation, contraception, family relationships, child rearing, and education. In explaining the respect the Constitution demands for the autonomy of the person in making these choices, the U.S. Supreme Court explained: These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to define one's own concept of existence, of meaning, of universe, and of the mystery of human life. Beliefs about these matters could not define the attributes of personhood where they formed under compulsion of the State.71 Persons desirous to own, operate and patronize the enumerated establishments under Section 1 of the Ordinance may seek autonomy for these purposes. Motel patrons who are single and unmarried may invoke this right to autonomy to consummate their bonds in intimate sexual conduct within the motel's premises r consensual sexual behavior does not contravene any fundamental state policy as contained in the Constitution.72 Adults have a right to choose to forge such relationships with others in the confines of their own private lives and still retain their dignity as free persons. The liberty protected by the Constitution allows persons the right to make this choice.73 Their right to liberty under the due process clause gives them the

full right to engage in their conduct without intervention of the government, as long as they do not run afoul of the law. Liberty should be the rule and restraint the exception. Liberty in the constitutional sense not only means freedom from unlawful government restraint; it must include privacy as well, if it is to be a repository of freedom. The right to be let alone is the beginning of all freedom f rights and the right most valued by civilized men.74 The concept of liberty compels respect for the individual whose claim to privacy and interference demands respect. As the case of Morfe v. Mutuc,75 borrowing the words of Laski, so very aptly stated: Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are indefeasible; indeed, they are so fundamental that they are the basis on which his civic obligations are built. He cannot abandon the consequences of his isolation, which are, broadly speaking, that his experience is private, and the will built out of that experience personal to himself. If he surrenders his will to others, he surrenders himself. If his will is set by the will of others, he ceases to be a master of himself. I cannot believe that a man no longer a master of himself is in any real sense free. Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which should be justified by a compelling state interest. Morfe accorded recognition to the right to privacy independently of its identification with liberty; in itself it is fully deserving of constitutional protection. Governmental powers should stop short of certain intrusions into the personal life of the citizen.76 There is a great temptation to have an extended discussion on these civil liberties but the Court chooses to exercise restraint and restrict itself to the issues presented when it should. The previous pronouncements of the Court are not to be interpreted as a license for adults to engage in criminal conduct. The reprehensibility of such conduct is not diminished. The Court only reaffirms and guarantees their right to make this choice. Should they be prosecuted for their illegal conduct, they should suffer the consequences of the choice they have made. That, ultimately, is their choice. Modality employed is unlawful taking In addition, the Ordinance is unreasonable and oppressive as it substantially divests the respondent of the beneficial use of its property.77 The Ordinance in Section 1 thereof forbids the running of the enumerated businesses in the Ermita-Malate area and in Section 3 instructs its owners/operators to wind up business operations or to transfer outside the area or convert said businesses into allowed businesses. An ordinance which permanently restricts the use of property that it can not be used for any reasonable purpose goes beyond regulation and must be recognized as a taking of the property without just compensation.78 It is intrusive and violative of the private property rights of individuals. The Constitution expressly provides in Article III, Section 9, that "private property shall not be taken for public use without just compensation." The provision is the most important protection of property rights in the Constitution. This is a restriction on the general power of the government to take property. The constitutional provision is about ensuring that the government does not confiscate the property of some to give it to others. In part too, it is about loss spreading. If the government takes away a person's property to benefit society, then society should pay. The principal purpose of the guarantee is "to bar the Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.79 There are two different types of taking that can be identified. A "possessory" taking occurs when the government confiscates or physically occupies property. A "regulatory" taking occurs when the government's regulation leaves no reasonable economically viable use of the property.80 In the landmark case of Pennsylvania Coal v. Mahon,81 it was held that a taking also could be found if government regulation of the use of property went "too far." When regulation reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent domain and compensation to support the act. While property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.82

No formula or rule can be devised to answer the questions of what is too far and when regulation becomes a taking. In Mahon, Justice Holmes recognized that it was "a question of degree and therefore cannot be disposed of by general propositions." On many other occasions as well, the U.S. Supreme Court has said that the issue of when regulation constitutes a taking is a matter of considering the facts in each case. The Court asks whether justice and fairness require that the economic loss caused by public action must be compensated by the government and thus borne by the public as a whole, or whether the loss should remain concentrated on those few persons subject to the public action.83 What is crucial in judicial consideration of regulatory takings is that government regulation is a taking if it leaves no reasonable economically viable use of property in a manner that interferes with reasonable expectations for use.84 A regulation that permanently denies all economically beneficial or productive use of land is, from the owner's point of view, equivalent to a "taking" unless principles of nuisance or property law that existed when the owner acquired the land make the use prohibitable.85 When the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.86 A regulation which denies all economically beneficial or productive use of land will require compensation under the takings clause. Where a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking nonetheless may have occurred, depending on a complex of factors including the regulation's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations and the character of government action. These inquiries are informed by the purpose of the takings clause which is to prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.87 A restriction on use of property may also constitute a "taking" if not reasonably necessary to the effectuation of a substantial public purpose or if it has an unduly harsh impact on the distinct investment-backed expectations of the owner.88 The Ordinance gives the owners and operators of the "prohibited" establishments three (3) months from its approval within which to "wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area." The directive to "wind up business operations" amounts to a closure of the establishment, a permanent deprivation of property, and is practically confiscatory. Unless the owner converts his establishment to accommodate an "allowed" business, the structure which housed the previous business will be left empty and gathering dust. Suppose he transfers it to another area, he will likewise leave the entire establishment idle. Consideration must be given to the substantial amount of money invested to build the edifices which the owner reasonably expects to be returned within a period of time. It is apparent that the Ordinance leaves no reasonable economically viable use of property in a manner that interferes with reasonable expectations for use. The second and third options the Ordinance is also equivalent to a "taking" of private property. The second option instructs the owners to abandon their property and build another one outside the Ermita-Malate area. In every sense, it qualifies as a taking without just compensation with an additional burden imposed on the owner to build another establishment solely from his coffers. The proffered solution does not put an end to the "problem," it merely relocates it. Not only is this impractical, it is unreasonable, onerous and oppressive. The conversion into allowed enterprises is just as ridiculous. How may the respondent convert a motel into a restaurant or a coffee shop, art gallery or music lounge without essentially destroying its property? This is a taking of private property without due process of law, nay, even without compensation. The penalty of closure likewise constitutes unlawful taking that should be compensated by the government. The burden on the owner to convert or transfer his business, otherwise it will be closed permanently after a subsequent violation should be borne by the public as this end benefits them as a whole. Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning ordinance, although a valid exercise of police power, which limits a "wholesome" property to a use which can not reasonably be made of it constitutes the taking of such property without just compensation. Private property which is not noxious nor intended for noxious purposes may not, by zoning, be destroyed without compensation. Such principle finds no support in the principles of justice as we know them. -Malate area or to convert into allowed ions found in Section 4 of

The police powers of local government units which have always received broad and liberal interpretation cannot be stretched to cover this particular taking. Distinction should be made between destruction from necessity and eminent domain. It needs restating that the property taken in the exercise of police power is destroyed because it is noxious or intended for a noxious purpose while the property taken under the power of eminent domain is intended for a public use or purpose and is therefore "wholesome."89 If it be of public benefit that a "wholesome" property remain unused or relegated to a particular purpose, then certainly the public should bear the cost of reasonable compensation for the condemnation of private property for public use.90 Further, the Ordinance fails to set up any standard to guide or limit the petitioners' actions. It in no way controls or guides the discretion vested in them. It provides no definition of the establishments covered by it and it fails to set forth the conditions when the establishments come within its ambit of prohibition. The Ordinance confers upon the mayor arbitrary and unrestricted power to close down establishments. Ordinances such as this, which make possible abuses in its execution, depending upon no conditions or qualifications whatsoever other than the unregulated arbitrary will of the city authorities as the touchstone by which its validity is to be tested, are unreasonable and invalid. The Ordinance should have established a rule by which its impartial enforcement could be secured.91 Ordinances placing restrictions upon the lawful use of property must, in order to be valid and constitutional, specify the rules and conditions to be observed and conduct to avoid; and must not admit of the exercise, or of an opportunity for the exercise, of unbridled discretion by the law enforcers in carrying out its provisions.92 Thus, in Coates v. City of Cincinnati,93 as cited in People v. Nazario,94 the U.S. Supreme Court struck down an ordinance that had made it illegal for "three or more persons to assemble on any sidewalk and there conduct themselves in a manner annoying to persons passing by." The ordinance was nullified as it imposed no standard at all "because one may never know in advance what 'annoys some people but does not annoy others.' " Similarly, the Ordinance does not specify the standards to ascertain which establishments "tend to disturb the community," "annoy the inhabitants," and "adversely affect the social and moral welfare of the community." The cited case supports the nullification of the Ordinance for lack of comprehensible standards to guide the law enforcers in carrying out its provisions. Petitioners cannot therefore order the closure of the enumerated establishments without infringing the due process clause. These lawful establishments may be regulated, but not prevented from carrying on their business. This is a sweeping exercise of police power that is a result of a lack of imagination on the part of the City Council and which amounts to an interference into personal and private rights which the Court will not countenance. In this regard, we take a resolute stand to uphold the constitutional guarantee of the right to liberty and property. Worthy of note is an example derived from the U.S. of a reasonable regulation which is a far cry from the ill-considered Ordinance enacted by the City Council. In FW/PBS, INC. v. Dallas,95 the city of Dallas adopted a comprehensive ordinance regulating "sexually oriented businesses," which are defined to include adult arcades, bookstores, video stores, cabarets, motels, and theaters as well as escort agencies, nude model studio and sexual encounter centers. Among other things, the ordinance required that such businesses be licensed. A group of motel owners were among the three groups of businesses that filed separate suits challenging the ordinance. The motel owners asserted that the city violated the due process clause by failing to produce adequate support for its supposition that renting room for fewer than ten (10) hours resulted in increased crime and other secondary effects. They likewise argued than the ten (10)-hour limitation on the rental of motel rooms placed an unconstitutional burden on the right to freedom of association. Anent the first contention, the U.S. Supreme Court held that the reasonableness of the legislative judgment combined with a study which the city considered, was adequate to support the city's determination that motels permitting room rentals for fewer than ten (10 ) hours should be included within the licensing scheme. As regards the second point, the Court held that limiting motel room rentals to ten (10) hours will have no discernible effect on personal bonds as those bonds that are formed from the use of a motel room for fewer than ten (10) hours are not those that have played a critical role in the culture and traditions of the nation by cultivating and transmitting shared ideals and beliefs. The ordinance challenged in the above-cited case merely regulated the targeted businesses. It imposed reasonable restrictions; hence, its validity was upheld.

The case of Ermita Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila,96 it needs pointing out, is also different from this case in that what was involved therein was a measure which regulated the mode in which motels may conduct business in order to put an end to practices which could encourage vice and immorality. Necessarily, there was no valid objection on due process or equal protection grounds as the ordinance did not prohibit motels. The Ordinance in this case however is not a regulatory measure but is an exercise of an assumed power to prohibit.97 The foregoing premises show that the Ordinance is an unwarranted and unlawful curtailment of property and personal rights of citizens. For being unreasonable and an undue restraint of trade, it cannot, even under the guise of exercising police power, be upheld as valid. B. The Ordinance violates Equal Protection Clause Equal protection requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to some and unjustly discriminate against others.98 The guarantee means that no person or class of persons shall be denied the same protection of laws which is enjoyed by other persons or other classes in like circumstances.99 The "equal protection of the laws is a pledge of the protection of equal laws."100 It limits governmental discrimination. The equal protection clause extends to artificial persons but only insofar as their property is concerned.101 The Court has explained the scope of the equal protection clause in this wise: What does it signify? To quote from J.M. Tuason & Co. v. Land Tenure Administration: "The ideal situation is for the law's benefits to be available to all, that none be placed outside the sphere of its coverage. Only thus could chance and favor be excluded and the affairs of men governed by that serene and impartial uniformity, which is of the very essence of the idea of law." There is recognition, however, in the opinion that what in fact exists "cannot approximate the ideal. Nor is the law susceptible to the reproach that it does not take into account the realities of the situation. The constitutional guarantee then is not to be given a meaning that disregards what is, what does in fact exist. To assure that the general welfare be promoted, which is the end of law, a regulatory measure may cut into the rights to liberty and property. Those adversely affected may under such circumstances invoke the equal protection clause only if they can show that the governmental act assailed, far from being inspired by the attainment of the common weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in reason." Classification is thus not ruled out, it being sufficient to quote from the Tuason decision anew "that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different, both in the privileges conferred and the liabilities imposed. Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances which, if not identical, are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding on the rest.102 Legislative bodies are allowed to classify the subjects of legislation. If the classification is reasonable, the law may operate only on some and not all of the people without violating the equal protection clause.103 The classification must, as an indispensable requisite, not be arbitrary. To be valid, it must conform to the following requirements: 1) It must be based on substantial distinctions. 2) It must be germane to the purposes of the law. 3) It must not be limited to existing conditions only. 4) It must apply equally to all members of the class.104 In the Court's view, there are no substantial distinctions between motels, inns, pension houses, hotels, lodging houses or other similar establishments. By definition, all are commercial establishments providing lodging and usually meals and other services for the public. No reason exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or other similar

establishments. The classification in the instant case is invalid as similar subjects are not similarly treated, both as to rights conferred and obligations imposed. It is arbitrary as it does not rest on substantial distinctions bearing a just and fair relation to the purpose of the Ordinance. The Court likewise cannot see the logic for prohibiting the business and operation of motels in the Ermita-Malate area but not outside of this area. A noxious establishment does not become any less noxious if located outside the area. The standard "where women are used as tools for entertainment" is also discriminatory as prostitution o women. Both men and women have an equal propensity to engage in prostitution. It is not any less grave a sin when men engage in it. And why would the assumption that there is an ongoing immoral activity apply only when women are employed and be inapposite when men are in harness? This discrimination based on gender violates equal protection as it is not substantially related to important government objectives.105 Thus, the discrimination is invalid. Failing the test of constitutionality, the Ordinance likewise failed to pass the test of consistency with prevailing laws. C. The Ordinance is repugnant to general laws; it is ultra vires The Ordinance is in contravention of the Code as the latter merely empowers local government units to regulate, and not prohibit, the establishments enumerated in Section 1 thereof. The power of the City Council to regulate by ordinances the establishment, operation, and maintenance of motels, hotels and other similar establishments is found in Section 458 (a) 4 (iv), which provides that: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: . . . (4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: . . . (iv) Regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments, including tourist guides and transports . . . . While its power to regulate the establishment, operation and maintenance of any entertainment or amusement facilities, and to prohibit certain forms of amusement or entertainment is provided under Section 458 (a) 4 (vii) of the Code, which reads as follows: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: . . . (4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: . . .

(vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community. Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments, the only power of the City Council to legislate relative thereto is to regulate them to promote the general welfare. The Code still withholds from cities the power to suppress and prohibit altogether the establishment, operation and maintenance of such establishments. It is well to recall the rulings of the Court in Kwong Sing v. City of Manila106 that: The word "regulate," as used in subsection (l), section 2444 of the Administrative Code, means and includes the power to control, to govern, and to restrain; but "regulate" should not be construed as synonymous with "suppress" or "prohibit." Consequently, under the power to regulate laundries, the municipal authorities could make proper police regulations as to the mode in which the employment or business shall be exercised.107 And in People v. Esguerra,108 wherein the Court nullified an ordinance of the Municipality of Tacloban which prohibited the selling, giving and dispensing of liquor ratiocinating that the municipality is empowered only to regulate the same and not prohibit. The Court therein declared that: (A)s a general rule when a municipal corporation is specifically given authority or power to regulate or to license and regulate the liquor traffic, power to prohibit is impliedly withheld.109 These doctrines still hold contrary to petitioners' assertion110 that they were modified by the Code vesting upon City Councils prohibitory powers. Similarly, the City Council exercises regulatory powers over public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement as found in the first clause of Section 458 (a) 4 (vii). Its powers to regulate, suppress and suspend "such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants" and to "prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community" are stated in the second and third clauses, respectively of the same Section. The several powers of the City Council as provided in Section 458 (a) 4 (vii) of the Code, it is pertinent to emphasize, are separated by semi-colons (;), the use of which indicates that the clauses in which these powers are set forth are independent of each other albeit closely related to justify being put together in a single enumeration or paragraph.111 These powers, therefore, should not be confused, commingled or consolidated as to create a conglomerated and unified power of regulation, suppression and prohibition.112 The Congress unequivocably specified the establishments and forms of amusement or entertainment subject to regulation among which are beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments (Section 458 (a) 4 (iv)), public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement (Section 458 (a) 4 (vii)). This enumeration therefore cannot be included as among "other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants" or "certain forms of amusement or entertainment" which the City Council may suspend, suppress or prohibit. The rule is that the City Council has only such powers as are expressly granted to it and those which are necessarily implied or incidental to the exercise thereof. By reason of its limited powers and the nature thereof, said powers are to be construed strictissimi juris and any doubt or ambiguity arising out of the terms used in granting said powers must be construed against the City Council.113 Moreover, it is a general rule in statutory construction that the express mention of one person, thing, or consequence is tantamount to an express exclusion of all others. Expressio unius est exclusio alterium. This maxim is based upon the rules of logic and the natural workings of human mind. It is particularly applicable in the construction of such statutes as create new rights or remedies, impose penalties or punishments, or otherwise come under the rule of strict construction.114

The argument that the City Council is empowered to enact the Ordinance by virtue of the general welfare clause of the Code and of Art. 3, Sec. 18 (kk) of the Revised Charter of Manila is likewise without merit. On the first point, the ruling of the Court in People v. Esguerra,115 is instructive. It held that: The powers conferred upon a municipal council in the general welfare clause, or section 2238 of the Revised Administrative Code, refers to matters not covered by the other provisions of the same Code, and therefore it can not be applied to intoxicating liquors, for the power to regulate the selling, giving away and dispensing thereof is granted specifically by section 2242 (g) to municipal councils. To hold that, under the general power granted by section 2238, a municipal council may enact the ordinance in question, notwithstanding the provision of section 2242 (g), would be to make the latter superfluous and nugatory, because the power to prohibit, includes the power to regulate, the selling, giving away and dispensing of intoxicating liquors. On the second point, it suffices to say that the Code being a later expression of the legislative will must necessarily prevail and override the earlier law, the Revised Charter of Manila. Legis posteriores priores contrarias abrogant, or later statute repeals prior ones which are repugnant thereto. As between two laws on the same subject matter, which are irreconcilably inconsistent, that which is passed later prevails, since it is the latest expression of legislative will.116 If there is an inconsistency or repugnance between two statutes, both relating to the same subject matter, which cannot be removed by any fair and reasonable method of interpretation, it is the latest expression of the legislative will which must prevail and override the earlier.117 Implied repeals are those which take place when a subsequently enacted law contains provisions contrary to those of an existing law but no provisions expressly repealing them. Such repeals have been divided into two general classes: those which occur where an act is so inconsistent or irreconcilable with an existing prior act that only one of the two can remain in force and those which occur when an act covers the whole subject of an earlier act and is intended to be a substitute therefor. The validity of such a repeal is sustained on the ground that the latest expression of the legislative will should prevail.118 In addition, Section 534(f) of the Code states that "All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly." Thus, submitting to petitioners' interpretation that the Revised Charter of Manila empowers the City Council to prohibit motels, that portion of the Charter stating such must be considered repealed by the Code as it is at variance with the latter's provisions granting the City Council mere regulatory powers. It is well to point out that petitioners also cannot seek cover under the general welfare clause authorizing the abatement of nuisances without judicial proceedings. That tenet applies to a nuisance per se, or one which affects the immediate safety of persons and property and may be summarily abated under the undefined law of necessity. It can not be said that motels are injurious to the rights of property, health or comfort of the community. It is a legitimate business. If it be a nuisance per accidens it may be so proven in a hearing conducted for that purpose. A motel is not per se a nuisance warranting its summary abatement without judicial intervention.119 Notably, the City Council was conferred powers to prevent and prohibit certain activities and establishments in another section of the Code which is reproduced as follows: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: (1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this connection, shall: . . . (v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual drunkenness in public places, vagrancy, mendicancy, prostitution, establishment and maintenance of houses of ill repute, gambling and other prohibited games of chance, fraudulent devices and ways to obtain money or property, drug addiction, maintenance of drug

dens, drug pushing, juvenile delinquency, the printing, distribution or exhibition of obscene or pornographic materials or publications, and such other activities inimical to the welfare and morals of the inhabitants of the city; . . . If it were the intention of Congress to confer upon the City Council the power to prohibit the establishments enumerated in Section 1 of the Ordinance, it would have so declared in uncertain terms by adding them to the list of the matters it may prohibit under the above-quoted Section. The Ordinance now vainly attempts to lump these establishments with houses of illrepute and expand the City Council's powers in the second and third clauses of Section 458 (a) 4 (vii) of the Code in an effort to overreach its prohibitory powers. It is evident that these establishments may only be regulated in their establishment, operation and maintenance. It is important to distinguish the punishable activities from the establishments themselves. That these establishments are recognized legitimate enterprises can be gleaned from another Section of the Code. Section 131 under the Title on Local Government Taxation expressly mentioned proprietors or operators of massage clinics, sauna, Turkish and Swedish baths, hotels, motels and lodging houses as among the "contractors" defined in paragraph (h) thereof. The same Section also defined "amusement" as a "pleasurable diversion and entertainment," "synonymous to relaxation, avocation, pastime or fun;" and "amusement places" to include "theaters, cinemas, concert halls, circuses and other places of amusement where one seeks admission to entertain oneself by seeing or viewing the show or performances." Thus, it can be inferred that the Code considers these establishments as legitimate enterprises and activities. It is well to recall the maxim reddendo singula singulis which means that words in different parts of a statute must be referred to their appropriate connection, giving to each in its place, its proper force and effect, and, if possible, rendering none of them useless or superfluous, even if strict grammatical construction demands otherwise. Likewise, where words under consideration appear in different sections or are widely dispersed throughout an act the same principle applies.120 Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions of P.D. 499. As correctly argued by MTDC, the statute had already converted the residential Ermita-Malate area into a commercial area. The decree allowed the establishment and operation of all kinds of commercial establishments except warehouse or open storage depot, dump or yard, motor repair shop, gasoline service station, light industry with any machinery or funeral establishment. The rule is that for an ordinance to be valid and to have force and effect, it must not only be within the powers of the council to enact but the same must not be in conflict with or repugnant to the general law.121 As succinctly illustrated in Solicitor General v. Metropolitan Manila Authority:122 The requirement that the enactment must not violate existing law explains itself. Local political subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national legislature (except only that the power to create their own sources of revenue and to levy taxes is conferred by the Constitution itself). They are mere agents vested with what is called the power of subordinate legislation. As delegates of the Congress, the local government units cannot contravene but must obey at all times the will of their principal. In the case before us, the enactment in question, which are merely local in origin cannot prevail against the decree, which has the force and effect of a statute.123 Petitioners contend that the Ordinance enjoys the presumption of validity. While this may be the rule, it has already been held that although the presumption is always in favor of the validity or reasonableness of the ordinance, such presumption must nevertheless be set aside when the invalidity or unreasonableness appears on the face of the ordinance itself or is established by proper evidence. The exercise of police power by the local government is valid unless it contravenes the fundamental law of the land, or an act of the legislature, or unless it is against public policy or is unreasonable, oppressive, partial, discriminating or in derogation of a common right.124 Conclusion All considered, the Ordinance invades fundamental personal and property rights and impairs personal privileges. It is constitutionally infirm. The Ordinance contravenes statutes; it is discriminatory and unreasonable in its operation; it is not sufficiently detailed and explicit that abuses may attend the enforcement of its sanctions. And not to be forgotten, the City Council under the Code had no power to enact the Ordinance and is therefore ultra vires, null and void.

Concededly, the challenged Ordinance was enacted with the best of motives and shares the concern of the public for the cleansing of the Ermita-Malate area of its social sins. Police power legislation of such character deserves the full endorsement of the judiciary rt for it. But inspite of its virtuous aims, the enactment of the Ordinance has no statutory or constitutional authority to stand on. Local legislative bodies, in this case, the City Council, cannot prohibit the operation of the enumerated establishments under Section 1 thereof or order their transfer or conversion without infringing the constitutional guarantees of due process and equal protection of laws WHEREFORE, the Petition is hereby DENIED and the decision of the Regional Trial Court declaring the Ordinance void is AFFIRMED. Costs against petitioners. SO ORDERED. Davide, Jr., C.J., Puno, Quisumbing, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Chico-Nazario and Garcia, JJ., concur Panganiban, J., in the result. Ynares- Santiago, J., concur in the result only. Dycacio vs SSS, 476 SCRA 538 (2005) DECISION CALLEJO, SR., J.: Before the Court is the petition for review under Rule 45 of the Rules of Court filed by Elena P. Dycaico which seeks to reverse and set aside the Decision[1] dated April 15, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 69632. The assailed decision affirmed the Resolution dated February 6, 2002 of the Social Security Commission (SSC), denying the petitioners claim for survivors pension accruing from the death of her husband Bonifacio S. Dycaico, a Social Security System (SSS) member-pensioner. Likewise sought to be reversed and set aside is the appellate courts Resolution dated December 15, 2003, denying the petitioners motion for reconsideration. The case arose from the following undisputed facts: Bonifacio S. Dycaico became a member of the SSS on January 24, 1980. In his self-employed data record (SSS Form RS-1), he named the petitioner, Elena P. Dycaico, and their eight children as his beneficiaries. At that time, Bonifacio and Elena lived together as husband and wife without the benefit of marriage. In June 1989, Bonifacio was considered retired and began receiving his monthly pension from the SSS. He continued to receive the monthly pension until he passed away on June 19, 1997. A few months prior to his death, however, Bonifacio married the petitioner on January 6, 1997. Shortly after Bonifacios death, the petitioner filed with the SSS an application for survivors pension. Her application, however, was denied on the ground that under Section 12-B(d) of Republic Act (Rep. Act) No. 8282 or the Social Security Law[2] she could not be considered a primary beneficiary of Bonifacio as of the date of his retirement. The said proviso reads: Sec. 12-B. Retirement Benefits.

Records show that the member [referring to Bonifacio] was considered retired on June 5, 1989 and monthly pension was cancelled upon our receipt of a report on his death on June 19, 1997. In your death claim application, submitted marriage contract with the deceased member shows that you were married in 1997 or after his retirement date; hence, you could not be considered his primary beneficiary. In view of this, we regret that there is no other benefit due you. However, if you do not conform with us, you may file a formal petition with our Social Security Commission to determine your benefit eligibility.[3] On July 9, 2001, the petitioner filed with the SSC a petition alleging that the denial of her survivors pension was unjustified. She contended that Bonifacio designated her and their children as primary beneficiaries in his SSS Form RS-1 and that it was not indicated therein that only legitimate family members could be made beneficiaries. Section 12-B(d) of Rep. Act No. 8282 does not, likewise, require that the primary beneficiaries be legitimate relatives of the member to be entitled to the survivors pension. The SSS is legally bound to respect Bonifacios designation of them as his beneficiaries. Further, Rep. Act No. 8282 should be interpreted to promote social justice. On February 6, 2002, the SSC promulgated its Resolution affirming the denial of the petitioners claim. The SSC refuted the petitioners contention that primary beneficiaries need not be legitimate family members by citing the definitions of primary beneficiaries and dependents in Section 8 of Rep. Act No. 8282. Under paragraph (k) of the said provision, primary beneficiaries are *t+he dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted, and illegitimate children Paragraph (e) of the same provision, on the other hand, defines dependents as the following: (1) *t+he legal spouse entitled by law to receive support from the member; (2) *t+he legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed and has not reached twenty-one (21) years of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of selfsupport, physically or mentally; and (3) [t]he parent who is receiving regular support from the member. Based on the foregoing, according to the SSC, it has consistently ruled that entitlement to the survivors pension in ones capacity as primary beneficiary is premised on the legitimacy of relationship with and dependency for support upon the deceased SSS member during his lifetime. Under Section 12-B(d) of Rep. Act No. 8282, the primary beneficiaries who are entitled to survivors pension are those who qualify as such as of the date of retirement of the deceased member. Hence, the petitioner, who was not then the legitimate spouse of Bonifacio as of the date of his retirement, could not be considered his primary beneficiary. The SSC further opined that Bonifacios designation of the petitioner as one of his primary beneficiaries in his SSS Form RS-1 is void, not only on moral considerations but also for misrepresentation. Accordingly, the petitioner is not entitled to claim the survivors pension under Section 12-B(d) of Rep. Act No. 8282. Aggrieved, the petitioner filed with the CA a petition for review of the SSCs February 6, 2002 Resolution. In the assailed Decision, dated April 15, 2003, the appellate court dismissed the petition. Citing the same provisions in Rep. Act No. 8282 as those cited by the SSC, the CA declared that since the petitioner was merely the common-law wife of Bonifacio at the time of his retirement in 1989, his designation of the petitioner as one of his beneficiaries in the SSS Form RS-1 in 1980 is void. The CA further observed that Bonifacios children with the petitioner could no longer qualify as primary beneficiaries because they have all reached twenty-one (21) years of age. The decretal portion of the assailed decision reads: WHEREFORE, premises considered, the Petition is DISMISSED and the assailed 06 February 2002 Resolution of respondent Commission is hereby AFFIRMED in toto. No costs. SO ORDERED.[4]

(d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension. Applying this proviso, the petitioner was informed that the The petitioner sought reconsideration of the said decision but in the assailed Resolution dated December 15, 2003, the appellate court denied her motion. Hence, the petitioners recourse to this Court. The petitioner points out that the term primary beneficiaries as used in Section 12-B(d) of Rep. Act No. 8282 does not have any qualification. She thus theorizes that regardless of whether the primary beneficiary designated by the member as such is legitimate or not, he or she is entitled to the survivors pension. Reliance by the appellate court and the SSC on the definitions

of primary beneficiaries and dependents in Section 8 of Rep. Act No. 8282 is allegedly unwarranted because these definitions cannot modify Section 12-B(d) thereof. The petitioner maintains that when she and Bonifacio got married in January 1997, a few months before he passed away, they merely intended to legalize their relationship and had no intention to commit any fraud. Further, since Rep. Act No. 8282 is a social legislation, it should be construed liberally in favor of claimants like the petitioner. She cites the Courts pronouncement that the sympathy of the law on social security is toward its beneficiaries, and the law, by its own terms, requires a construction of utmost liberality in their favor.*5+ The SSS, on the other hand, contends that Section 12-B(d) of Rep. Act No. 8282 should be read in conjunction with the definition of the terms dependents and primary beneficiaries in Section 8 thereof. Since the petitioner was not as yet the legal spouse of Bonifacio at the time of his retirement in 1989, she is not entitled to claim the survivors pension accruing at the time of his death. The SSS insists that the designation by Bonifacio of the petitioner and their illegitimate children in his SSS Form RS-1 is void. According to the SSS, there is nothing in Rep. Act No. 8282 which provides that should there be no primary or secondary beneficiaries, the benefit accruing from the death of a member should go to his designated common-law spouse and that to rule otherwise would be to condone the designation of common-law spouses as beneficiaries, a clear case of circumventing the SS Law and a violation of public policy and morals.*6+ Finally, the SSS is of the opinion that Section 12-B(d) of Rep. Act No. 8282 is clear and explicit; hence, there is no room for its interpretation, only for application. In the Resolution dated July 19, 2005, the Court required the parties, as well as the Office of the Solicitor General, to file their respective comments on the issue of whether or not the proviso as of the date of his retirement in Section 12-B(d) of Rep. Act No. 8282 violates the equal protection and due process clauses of the Constitution. The Court believes that this issue is intertwined with and indispensable to the resolution of the merits of the petition. In compliance therewith, in its comment, the SSC argues that the proviso as of the date of his retirement in Section 12-B(d) of Rep. Act No. 8282 does not run afoul of the equal protection clause of the Constitution as it merely determines the reckoning date of qualification and entitlement of beneficiaries to the survivorship pension. It asserts that this classification of beneficiaries is based on valid and substantial distinctions that are germane to the legislative purpose of Rep. Act No. 8282. The SSC also impugns the marriage of the petitioner to Bonifacio after his retirement stating that it was contracted as an afterthought to enable her to qualify for the survivorship pension upon the latters death. It further alleges that there is no violation of the due process clause as the petitioner was given her day in court and was able to present her side. The SSS filed its separate comment and therein insists that the petitioner was not the legitimate spouse of the deceased member at the time when the contingency occurred (his retirement) and, therefore, she could not be considered a primary beneficiary within the contemplation of Rep. Act No. 8282. The SSS posits that the statutes intent is to give survivorship pension only to primary beneficiaries at the time of the retirement of the deceased member. Rep. Act No. 8282 itself ordains the persons entitled thereto and cannot be subject of change by the SSS. The Solicitor General agrees with the stance taken by the SSS that the proviso as of the date of his retirement merely marks the period when the primary beneficiary must be so to be entitled to the benefits. It does not violate the equal protection clause because the classification resulting therefrom rests on substantial distinctions. Moreover, the condition as to the period for entitlement, i.e., as of the date of the members retirement, is relevant as it set the parameters for those availing of the benefits and it applies to all those similarly situated. The Solicitor General is also of the view that the said proviso does not offend the due process clause because claimants are given the opportunity to file their claims and to prove their case before the Commission. For clarity, Section 12-B(d) of Rep. Act No. 8282 is quoted anew below: Sec. 12-B. Retirement Benefits.

(d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension. Under Section 8(k) of the same law, the primary beneficiaries are: 1. 2. The dependent spouse until he or she remarries; and The dependent legitimate, legitimated or legally adopted, and illegitimate children.

Further, the dependent spouse and dependent children are qualified under paragraph (e) of the same section as follows: 1. The legal spouse entitled by law to receive support until he or she remarries; and 2. The dependent legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed and has not reached twenty-one (21) years of age, or if over twenty-one years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally. The SSS denied the petitioners application for survivors pension on the sole ground that she was not the legal spouse of Bonifacio as of the date of his retirement; hence, she could not be considered as his primary beneficiary under Section 12B(d) of Rep. Act No. 8282. The Court holds that the proviso as of the date of his retirement in Section 12-B(d) of Rep. Act No. 8282, which qualifies the term primary beneficiaries, is unconstitutional for it violates the due process and equal protection clauses of the Constitution.[7] In an analogous case, Government Service Insurance System v. Montesclaros,[8] the Court invalidated the proviso in Presidential Decree (P.D.) No. 1146*9+ which stated that the dependent spouse shall not be entitled to said pension if his marriage with the pensioner is contracted within three years before the pensioner qualified for the pension. In the said case, the Court characterized retirement benefits as property interest of the pensioner as well as his or her surviving spouse. The proviso, which denied a dependent spouses claim for survivorship pension if the dependent spouse contracted marriage to the pensioner within the three-year prohibited period, was declared offensive to the due process clause. There was outright confiscation of benefits due the surviving spouse without giving him or her an opportunity to be heard. The proviso was also held to infringe the equal protection clause as it discriminated against dependent spouses who contracted their respective marriages to pensioners within three years before they qualified for their pension. For reasons which shall be discussed shortly, the proviso as of the date of his retirement in Section 12-B(d) of Rep. Act No. 8282 similarly violates the due process and equal protection clauses of the Constitution. The proviso infringes the equal protection clause As illustrated by the petitioners case, the proviso as of the date of his retirement in Section 12-B(d) of Rep. Act No. 8282 which qualifies the term primary beneficiaries results in the classification of dependent spouses as primary beneficiaries into two groups: (1) Those dependent spouses whose respective marriages to SSS members were contracted prior to the latters retirement; and (2) Those dependent spouses whose respective marriages to SSS members were contracted after the latters retirement. Underlying these two classifications of dependent spouses is that their respective marriages are valid. In other words, both groups are legitimate or legal spouses. The distinction between them lies solely on the date the marriage was contracted. The petitioner belongs to the second group of dependent spouses, i.e., her marriage to Bonifacio was contracted after his retirement. As such, she and those similarly situated do not qualify as primary beneficiaries under Section 12-B(d) of Rep. Act No. 8282 and, therefore, are not entitled to survivors pension under the same provision by reason of the subject proviso. It is noted that the eligibility of dependent children who are biological offsprings of a retired SSS member to be considered as his primary beneficiaries under Section 12-B(d) of Rep. Act No. 8282 is not substantially affected by the proviso as of the date of his retirement. A biological child, whether legitimate, legitimated or illegitimate, is entitled to survivors pension upon the

death of a retired SSS member so long as the said child is unmarried, not gainfully employed and has not reached twenty-one (21) years of age, or if over twenty-one (21) years of age, he or she is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally. On the other hand, the eligibility of legally adopted children to be considered primary beneficiaries under Section 12-B(d) of Rep. Act No. 8282 is affected by the proviso as of the date of his retirement in the same manner as the dependent spouses. A legally adopted child who satisfies the requirements in Section 8(e)(2)[10] thereof is considered a primary beneficiary of a retired SSS member upon the latters death only if the said child had been legally adopted prior to the members retirement. One who was legally adopted by the SSS member after his or her retirement does not qualify as a primary beneficiary for the purpose of entitlement to survivors pension under Section 12-B(d) of Rep. Act No. 8282. In any case, the issue that now confronts the Court involves a dependent spouse who claims to have been unjustly deprived of her survivors pension under Section 12-B(d) of Rep. Act No. 8282. Hence, the subsequent discussion will focus on the resultant classification of the dependent spouses as primary beneficiaries under the said provision. As earlier stated, the petitioner belongs to the second group of dependent spouses, i.e., her marriage to Bonifacio was contracted after his retirement. She and those similarly situated are undoubtedly discriminated against as the proviso as of the date of his retirement disqualifies them from being considered primary beneficiaries for the purpose of entitlement to survivors pension. Generally, a statute based on reasonable classification does not violate the constitutional guaranty of the equal protection clause of the law.[11] With respect to Rep. Act No. 8282, in particular, as a social security law, it is recognized that it is permeated with provisions that draw lines in classifying those who are to receive benefits. Congressional decisions in this regard are entitled to deference as those of the institution charged under our scheme of government with the primary responsibility for making such judgments in light of competing policies and interests.*12+ However, as in other statutes, the classification in Rep. Act No. 8282 with respect to entitlement to benefits, to be valid and reasonable, must satisfy the following requirements: (1) it must rest on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all members of the same class.[13] The legislative history of Rep. Act No. 8282 does not bear out the purpose of Congress in inserting the proviso as of the date of his retirement to qualify the term primary beneficiaries in Section 12-B(d) thereof. To the Courts mind, however, it reflects congressional concern with the possibility of relationships entered after retirement for the purpose of obtaining benefits. In particular, the proviso was apparently intended to prevent sham marriages or those contracted by persons solely to enable one spouse to claim benefits upon the anticipated death of the other spouse. This concern is concededly valid. However, classifying dependent spouses and determining their entitlement to survivors pension based on whether the marriage was contracted before or after the retirement of the other spouse, regardless of the duration of the said marriage, bears no relation to the achievement of the policy objective of the law, i.e., provide meaningful protection to members and their beneficiaries against the hazard of disability, sickness, maternity, old age, death and other contingencies resulting in loss of income or financial burden."[14] The nexus of the classification to the policy objective is vague and flimsy. Put differently, such classification of dependent spouses is not germane to the aforesaid policy objective. For if it were the intention of Congress to prevent sham marriages or those entered in contemplation of imminent death, then it should have prescribed a definite duration-of-relationship or durational period of relationship as one of the requirements for entitlement to survivors pension. For example, in the United States, a provision in their social security law which excludes from social security benefits the surviving wife and stepchild of a deceased wage earner who had their respective relationships to the wage earner for less than nine months prior to his death, was declared valid.[15] Thus, nine months is recognized in the United States as the minimum duration of a marriage to consider it as having been contracted in good faith for the purpose of entitlement to survivorship pension. In contrast, the proviso as of the date of his retirement in Section 12-B(d) in Rep. Act No. 8282 effectively disqualifies from entitlement to survivors pension all those dependent spouses whose respective marriages to retired SSS members were contracted after the latters retirement. The duration of the marriage is not even considered. It is observed that, in certain

instances, the retirement age under Rep. Act No. 8282 is sixty (60) years old.[16] A marriage contracted by a retired SSS member after the said age may still last for more than ten years, assuming the member lives up to over seventy (70) years old. In such a case, it cannot be said that the marriage was a sham or was entered into solely for the purpose of enabling one spouse to obtain the financial benefits due upon the death of the other spouse. Nonetheless, the said surviving spouse is not entitled to survivors pension because he or she is not a primary beneficiary as of the date of retirement of the SSS member following Section 12-B(d) of Rep. Act No. 8282.

Further, the classification of dependent spouses on the basis of whether their respective marriages to the SSS member were contracted prior to or after the latters retirement for the purpose of entitlement to survivors pension does not rest on real and substantial distinctions. It is arbitrary and discriminatory. It is too sweeping because the proviso as of the date of his retirement, which effectively disqualifies the dependent spouses whose respective marriages to the retired SSS member were contracted after the latters retirement as primary beneficiaries, unfairly lumps all these marriages as sham relationships or were contracted solely for the purpose of acquiring benefits accruing upon the death of the other spouse. The proviso thus unduly prejudices the rights of the legal surviving spouse, like the petitioner, and defeats the avowed policy of the law to provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden.*17+ The proviso infringes the due process clause As earlier opined, in Government Service Insurance System v. Montesclaros,[18] the Court characterized retirement benefits as a property interest of a retiree. We held therein that *i+n a pension plan where employee participation is mandatory, the prevailing view is that employees have contractual or vested rights in the pension where the pension is part of the terms of employment.*19+ Thus, it was ruled that, where the employee retires and meets the eligibility requirements, he acquires a vested right to benefits that is protected by the due process clause and *r+etirees enjoy a protected property interest whenever they acquire a right to immediate payment under pre-existing law.*20+ Further, since pursuant to the pertinent law therein, the dependent spouse is entitled to survivorship pension, a widows right to receive pension following the demise of her husband is also part of the husbands contractual compensation.*21+ Although the subject matter in the above-cited case involved the retirement benefits under P.D. No. 1146 or the Revised Government Service Insurance Act of 1977[22] covering government employees, the pronouncement therein that retirees enjoy a protected property interest in their retirement benefits applies squarely to those in the private sector under Rep. Act No. 8282. This is so because the mandatory contributions of both the employers[23] and the employees[24] to the SSS do not, likewise, make the retirement benefits under Rep. Act No. 8282 mere gratuity but form part of the latters compensation. Even the retirement benefits of self-employed individuals, like Bonifacio, who have been included in the compulsory coverage of Rep. Act No. 8282[25] are not mere gratuity because they are required to pay both the employer and employee contributions.*26+ Further, under Rep. Act No. 8282, the surviving spouse is entitled to survivors pension accruing on the death of the member; hence, the surviving spouses right to receive such benefit following the demise of the wife or husband, as the case may be, is also part of the latters contractual compensation. The proviso as of the date of his retirement in Section 12-B(d) of Rep. Act No. 8282 runs afoul of the due process clause as it outrightly deprives the surviving spouses whose respective marriages to the retired SSS members were contracted after the latters retirement of their survivors benefits. There is outright confiscation of benefits due such surviving spouses without giving them an opportunity to be heard. By this outright disqualification of the surviving spouses whose respective marriages to SSS members were contracted after the latters retirement, the proviso as of the date of his retirement qualifying the term primary beneficiaries for the purpose of entitlement to survivors pension has created the presumption that marriages contracted after the retirement date of SSS members were entered into for the purpose of securing the benefits under Rep. Act No. 8282. This presumption, moreover, is conclusive because the said surviving spouses are not afforded any opportunity to disprove the presence of the illicit purpose. The proviso, as it creates this conclusive presumption, is unconstitutional because it presumes a fact which is not necessarily or universally true. In the United States, this kind of presumption is characterized as an irrebuttable presumption and statutes creating permanent and irrebutable presumptions have long been disfavored under the due process clause. [27]

In the petitioners case, for example, she asserted that when she and Bonifacio got married in 1997, it was merely to legalize their relationship and not to commit fraud. This claim is quite believable. After all, they had been living together since 1980 and, in fact, during that time their eldest child was already twenty-four (24) years old. However, the petitioner was not given any opportunity to prove her claim that she was Bonifacios bona fide legal spouse as she was automatically disqualified from being considered as his primary beneficiary. In effect, the petitioner was deprived of the survivors benefits, a property interest, accruing from the death of Bonifacio without any opportunity to be heard. Standards of due process require that the petitioner be allowed to present evidence to prove that her marriage to Bonifacio was contracted in good faith and as his bona fide spouse she is entitled to the survivors pension accruing upon his death.*28+ Hence, the proviso as of the date of his retirement in Section 12-B(d) which deprives the petitioner and those similarly situated dependent spouses of retired SSS members this opportunity to be heard must be struck down. Conclusion Even as the proviso as of the date of his retirement in Section 12-B(d) is nullified, the enumeration of primary beneficiaries for the purpose of entitlement to survivors pension is not substantially affected since the following persons are considered as such under Section 8(k) of Rep. Act No. 8282: (1) The dependent spouse until he or she remarries; and (2) The dependent legitimate, legitimated or legally adopted, and illegitimate children. In relation thereto, Section 8(e) thereof qualifies the dependent spouse and dependent children as follows: (1) The legal spouse entitled by law to receive support from the member; (2) The legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed and has not reached twenty-one years (21) of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally. Finally, the Court concedes that the petitioner did not raise the issue of the validity of the proviso as of the date of his retirement in Section 12-B(d) of Rep. Act No. 8282. The rule is that the Court does not decide questions of a constitutional nature unless absolutely necessary to a decision of the case.[29] However, the question of the constitutionality of the proviso is absolutely necessary for the proper resolution of the present case. Accordingly, the Court required the parties to present their arguments on this issue and proceeded to pass upon the same in the exercise of its equity jurisdiction and in order to render substantial justice to the petitioner who, presumably in her advanced age by now, deserves to receive forthwith the survivors pension accruing upon the death of her husband.

(R.A.) No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA). Also assailed is Rule 33 of the Implementing Rules and Regulations (IRR) of the EPIRA. The facts of the case are as follows: On June 8, 2001, the EPIRA was enacted by Congress with the goal of restructuring the electric power industry and privatization of the assets of the National Power Corporation (NPC). Pursuant to Section 48[3] of the EPIRA, a new National Power Board of Directors (NPB) was created. On February 27, 2002, pursuant to Section 77[4] of the EPIRA, the Secretary of the Department of Energy promulgated the IRR. On the other hand, Section 63 of the EPIRA provides for separation benefits to officials and employees who would be affected by the restructuring of the electric power industry and the privatization of the assets of the NPC, to wit: Section 63. Separation Benefits of Officials and Employees of Affected Agencies. - National Government employees displaced or separated from the service as a result of the restructuring of the electricity industry and privatization of NPC assets pursuant to this Act, shall be entitled to either a separation pay and other benefits in accordance with existing laws, rules or regulations or be entitled to avail of the privileges provided under a separation plan which shall be one and one-half month salary for every year of service in the government: Provided, however, That those who avail of such privileges shall start their government service anew if absorbed by any government-owned successor company. In no case shall there be any diminution of benefits under the separation plan until the full implementation of the restructuring and privatization. Displaced or separated personnel as a result of the privatization, if qualified, shall be given preference in the hiring of the manpower requirements of the privatized companies. x x x[5] Rule 33[6] of the IRR provided for the coverage and the guidelines for the separation benefits to be given to the employees affected. On November 18, 2002, pursuant to Section 63 of the EPIRA and Rule 33 of the IRR, the NPB passed NPB Resolution No. 2002124[7] which, among others, resolved that all NPC personnel shall be legally terminated on January 31, 2003 and shall be entitled to separation benefits. On the same day, the NPB passed NPB Resolution No. 2002-125[8] which created a transition team to manage and implement the separation program. As a result of the foregoing NPB Resolutions, petitioner Enrique U. Betoy, together with thousands of his co-employees from the NPC were terminated. Hence, herein petition for certiorari with petitioner praying for the grant of the following reliefs from this Court, to wit:

WHEREFORE, the petition is GRANTED. The Decision dated April 15, 2003 and Resolution dated December 15, 2003 of the Court of Appeals in CA-G.R. SP No. 69632 are REVERSED and SET ASIDE. The proviso as of the date of his retirement in Section 12-B(d) of Rep. Act No. 8282 is declared VOID for being contrary to the due process and equal protection clauses of the Constitution. The Social Security System cannot deny the claim of petitioner Elena P. Dycaico for survivors pension on the basis of this invalid proviso. SO ORDERED. Betoy vs Board of Directors, NPC 658 SCRA 420 (2011) DECISION PERALTA, J.: Before this Court is a special civil action for certiorari[1] and supplemental petition for mandamus,[2] specifically assailing National Power Board Resolutions No. 2002-124 and No. 2002-125, as well as Sections 11, 34, 38, 48, 52 and 63 of Republic Act

1. Declaring National Power Board Resolution Nos. 2002-124 and 2002-125 and its Annex "B" Null and Void, the fact [that] it was done with extraordinary haste and in secrecy without the able participation of the Napocor Employees Consolidated Union (NECU) to represent all career civil service employees on issues affecting their rights to due process, equity, security of tenure, social benefits accrued to them, and as well as the disclosure of public transaction provisions of the 1987 Constitution because during its proceeding the National Power Board had acted with grave abuse of discretion and disregarding constitutional and statutory injunctions on removal of public servants and non-diminution of social benefits accrued to separated employees, thus, amounting to excess of jurisdiction; 2. Striking down Section 11, Section 48 and Section 52 of RA 9136 (EPIRA) for being violative of Section 13, Article VII of the 1987 Constitution and, therefore, unconstitutional; 3. Striking Section 34 of RA 9136 (EPIRA) for being exorbitant display of State Power and was not premised on the welfare of the FILIPINO PEOPLE or principle of salus populi est suprema lex; 4. Striking down Section 38 for RA 9136 (EPIRA) for being a prelude to Charter Change without a valid referendum for ratification of the entire voter citizens of the Philippine Republic;

5. Striking down all other provisions of RA 9136 (EPIRA) found repugnant to the 1987 Constitution; 6. Striking down all provisions of the Implementing Rules and Regulations (IRR) of the EPIRA found repugnant to the 1987 Constitution; 7. Striking down Section 63 of RA 9136 (EPIRA) for classifying such provisions in the same vein with Proclamation No. 50 used against MWSS employees and its failure to classify which condition comes first whether the restructuring effecting total reorganization of the electric power industry making NPC financially viable or the privatization of NPC assets where manpower reduction or sweeping/lay-off or termination of career civil service employees follows the disposal of NPC assets. This is a clear case of violation of the EQUAL PROTECTION CLAUSE, therefore, unconstitutional; 8. Striking down Rule 33 of the Implementing Rules [and] Regulations (IRR) for disregarding the constitutional and statutory injunction on arbitrary removal of career civil service employees; and 9. For such other reliefs deemed equitable with justice and fairness to more than EIGHT THOUSAND (8,000) EMPLOYEES of the National Power Corporation (NPC) whose fate lies in the sound disposition of the Honorable Supreme Court.[9] In addition, petitioner also filed a supplemental petition for mandamus praying for his reinstatement. The petition is without merit. Before anything else, this Court shall first tackle whether it was proper for petitioner to directly question the constitutionality of the EPIRA before this Court. Section 5(1) and (2), Article VIII of the 1987 Constitution provides that: SECTION 5. The Supreme Court shall have the following powers: 1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. 2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the rules of court may provide, final judgments and orders of lower courts in: (a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.[10] Based on the foregoing, this Court's jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, and habeas corpus, while concurrent with that of the Regional Trial Courts and the Court of Appeals, does not give litigants unrestrained freedom of choice of forum from which to seek such relief. [11] The determination of whether the assailed law and its implementing rules and regulations contravene the Constitution is within the jurisdiction of regular courts. The Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the Regional Trial Courts.[12] It has long been established that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts, or where exceptional and compelling circumstances justify availment of a remedy within and call for the exercise of our primary jurisdiction. [13] Thus, herein petition should already be dismissed at the outset; however, since similar petitions have already been resolved by this Court tackling the validity of NPB Resolutions No. 2002-124 and No. 2002125, as well as the constitutionality of certain provisions of the EPIRA, this Court shall disregard the procedural defect. Validity of NPB Resolutions No. 2002-124 and No. 2002-125 The main issue raised by petitioner deals with the validity of NPB Resolutions No. 2002-124 and No. 2002-125.

In NPC Drivers and Mechanics Association (NPC DAMA) v. National Power Corporation (NPC),[14] this Court had already ruled that NPB Resolutions No. 2002-124 and No. 2002-125 are void and of no legal effect. NPC Drivers involved a special civil action for Injunction seeking to enjoin the implementation of the same assailed NPB Resolutions. Petitioners therein put in issue the fact that the NPB Resolutions were not concluded by a duly constituted Board of Directors since no quorum in accordance with Section 48 of the EPIRA existed. In addition, petitioners therein argued that the assailed NPB Resolutions cannot be given legal effect as it failed to comply with Section 47 of the EPIRA which required the endorsement of the Joint Congressional Power Commission and the President of the Philippines. Ruling in favor of petitioners therein, this Court ruled that NPB Resolutions No. 2002-124 and No. 2002-125 are void and of no legal effect for failure to comply with Section 48 of the EPIRA, to wit: We agree with petitioners. In enumerating under Section 48 those who shall compose the National Power Board of Directors, the legislature has vested upon these persons the power to exercise their judgment and discretion in running the affairs of the NPC. Discretion may be defined as "the act or the liberty to decide according to the principles of justice and one's ideas of what is right and proper under the circumstances, without willfulness or favor. Discretion, when applied to public functionaries, means a power or right conferred upon them by law of acting officially in certain circumstances, according to the dictates of their own judgment and conscience, uncontrolled by the judgment or conscience of others. It is to be presumed that in naming the respective department heads as members of the board of directors, the legislature chose these secretaries of the various executive departments on the basis of their personal qualifications and acumen which made them eligible to occupy their present positions as department heads. Thus, the department secretaries cannot delegate their duties as members of the NPB, much less their power to vote and approve board resolutions, because it is their personal judgment that must be exercised in the fulfilment of such responsibility. xxxx In the case at bar, it is not difficult to comprehend that in approving NPB Resolutions No. 2002-124 and No. 2002-125, it is the representatives of the secretaries of the different executive departments and not the secretaries themselves who exercised judgment in passing the assailed Resolution, as shown by the fact that it is the signatures of the respective representatives that are affixed to the questioned Resolutions. This, to our mind, violates the duty imposed upon the specifically enumerated department heads to employ their own sound discretion in exercising the corporate powers of the NPC. Evidently, the votes cast by these mere representatives in favor of the adoption of the said Resolutions must not be considered in determining whether or not the necessary number of votes was garnered in order that the assailed Resolutions may be validly enacted. Hence, there being only three valid votes cast out of the nine board members, namely those of DOE Secretary Vincent S. Perez, Jr.; Department of Budget and Management Secretary Emilia T. Boncodin; and NPC OIC-President Rolando S. Quilala, NPB Resolutions No. 2002-124 and No. 2002-125 are void and are of no legal effect.[15] However, a supervening event occurred in NPC Drivers when it was brought to this Court's attention that NPB Resolution No. 2007-55 was promulgated on September 14, 2007 confirming and adopting the principles and guidelines enunciated in NPB Resolutions No. 2002-124 and No. 2002-125. On December 2, 2009, this Court promulgated a Resolution[16] clarifying the amount due the individual employees of NPC in view of NPB Resolution No. 2007-55. In said Resolution, this Court clarified the exact date of the legal termination of each class of NPC employees, thus: From all these, it is clear that our ruling, pursuant to NPB Resolution No. 2002-124, covers all employees of the NPC and not only the 16 employees as contended by the NPC. However, as regards their right to reinstatement, or separation pay in lieu of reinstatement, pursuant to a validly approved Separation Program, plus backwages, wage adjustments, and other benefits, the same shall be computed from the date of legal termination as stated in NPC Circular No. 2003-09, to wit: a) The legal termination of key officials, i.e., the Corporate Secretary, Vice-Presidents and Senior Vice-Presidents who were appointed under NP Board Resolution No. 2003-12, shall be at the close of office hours of January 31, 2003. b) The legal termination of personnel who availed of the early leavers' scheme shall be on the last day of service in NPC but not beyond January 15, 2003.

c) The legal termination of personnel who were no longer employed in NPC after June 26, 2001 shall be the date of actual separation in NPC. d) For all other NPC personnel, their legal termination shall be at the close of office hours/shift schedule of February 28, 2003.[17] As to the validity of NPB Resolution No. 2007-55, this Court ruled that the same will have a prospective effect, to wit: What then is the effect of the approval of NPB Resolution No. 2007-55 on 14 September 2007? The approval of NPB Resolution No. 2007-55, supposedly by a majority of the National Power Board as designated by law, that adopted, confirmed and approved the contents of NPB Resolutions No. 2002-124 and No. 2002-125 will have a prospective effect, not a retroactive effect. The approval of NPB Resolution No. 2007-55 cannot ratify and validate NPB Resolutions No. 2002-124 and No. 2002-125 as to make the termination of the services of all NPC personnel/employees on 31 January 2003 valid, because said resolutions were void. The approval of NPB Resolution No. 2007-55 on 14 September 2007 means that the services of all NPC employees have been legally terminated on this date. All separation pay and other benefits to be received by said employees will be deemed cut on this date. The computation thereof shall, therefore, be from the date of their illegal termination pursuant to NPB Resolutions No. 2002-124 and No. 2002-125 as clarified by NPB Resolution No. 2003-11 and NPC Resolution No. 2003-09 up to 14 September 2007. Although the validity of NPB Resolution No. 2007-55 has not yet been passed upon by the Court, same has to be given effect because NPB Resolution No. 2007-55 enjoys the presumption of regularity of official acts. The presumption of regularity of official acts may be rebutted by affirmative evidence of irregularity or failure to perform a duty. Thus, until and unless there is clear and convincing evidence that rebuts this presumption, we have no option but to rule that said resolution is valid and effective as of 14 September 2007.[18] Based on the foregoing, this Court concluded that the computation of the amounts due the employees who were terminated and/or separated as a result of, or pursuant to, the nullified NPB Board Resolutions No. 2002-124 and No. 2002-125 shall be from their date of illegal termination up to September 14, 2007 when NPB Resolution No. 2007-55 was issued. Thus, the resolution of the validity of NPB Board Resolutions No. 2002-124 and No. 2002-125 is, therefore, moot and academic in view of the Court's pronouncements in NPC Drivers. Anent the question of the constitutionality of Section 63 of RA 9136, as well as Rule 33 of the IRR, this Court finds that the same is without merit. A reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions. [19] It could result in the loss of one's position through removal or abolition of an office. However, for a reorganization for the purpose of economy or to make the bureaucracy more efficient to be valid, it must pass the test of good faith; otherwise, it is void ab initio.[20] It is undisputed that NPC was in financial distress and the solution found by Congress was to pursue a policy towards its privatization. The privatization of NPC necessarily demanded the restructuring of its operations. To carry out the purpose, there was a need to terminate employees and re-hire some depending on the manpower requirements of the privatized companies. The privatization and restructuring of the NPC was, therefore, done in good faith as its primary purpose was for economy and to make the bureaucracy more efficient. In Freedom from Debt Coalition v. Energy Regulatory Commission,[21] this Court discussed why there was a need for a shift towards the privatization and restructuring of the electric power industry, to wit: One of the landmark pieces of legislation enacted by Congress in recent years is the EPIRA. It established a new policy, legal structure and regulatory framework for the electric power industry. The new thrust is to tap private capital for the expansion and improvement of the industry as the large government debt and the highly capital-intensive character of the industry itself have long been acknowledged as the critical constraints to the program. To attract private investment, largely foreign, the jaded structure of the industry had to be addressed. While the

generation and transmission sectors were centralized and monopolistic, the distribution side was fragmented with over 130 utilities, mostly small and uneconomic. The pervasive flaws have caused a low utilization of existing generation capacity; extremely high and uncompetitive power rates; poor quality of service to consumers; dismal to forgettable performance of the government power sector; high system losses; and an inability to develop a clear strategy for overcoming these shortcomings. Thus, the EPIRA provides a framework for the restructuring of the industry, including the privatization of the assets of the National Power Corporation (NPC), the transition to a competitive structure, and the delineation of the roles of various government agencies and the private entities. The law ordains the division of the industry into four (4) distinct sectors, namely: generation, transmission, distribution and supply. Corollarily, the NPC generating plants have to be privatized and its transmission business spun off and privatized thereafter.[22] Petitioner argues that bad faith is clearly manifested as the reorganization has an eye to replace current favorite less competent appointees. In addition, petitioner contends that qualifications and behavioral aspect were being set aside.[23] Section 2 of R.A. No. 6656[24] cites certain circumstances showing bad faith in the removal of employees as a result of any reorganization, thus: Sec. 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exist when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of the reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party: a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; b) Where an office is abolished and another performing substantially the same functions is created; c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices; and e) Where the removal violates the order of separation provided in Section 3 hereof. The Solicitor General, however, argues that petitioner has not shown any circumstance to prove that the restructuring of NPC was done in bad faith. We agree. Petitioner's allegation that the reorganization was merely undertaken to accommodate new appointees is at most speculative and bereft of any evidence on record. It is settled that bad faith must be duly proved and not merely presumed. It must be proved by clear and convincing evidence,[25] which is absent in the case at bar. In addition, petitioner has no legal or vested right to be reinstated as Section 63 of the EPIRA as well as Section 5, Rule 33 of the IRR clearly state that the displaced or separated personnel as a result of the privatization, if qualified, shall be given preference in the hiring of the manpower requirements of the privatized companies. Clearly, the law only speaks of preference and by no stretch of the imagination can the same amount to a legal right to the position. Undoubtedly, not all the terminated employees will be re-hired by the selection committee as the manpower requirement of the privatized companies will be different. As correctly observed by the Solicitor General, the selection of employees for purposes of re-hiring them necessarily entails the exercise of discretion or judgment.[26] Such being the case, petitioner, cannot, by way of mandamus, compel the selection committee to include him in the re-hired employees, more so, since there is no evidence showing that said committee acted with grave abuse of discretion or that the re-hired employees were merely accommodated and not qualified. Validity of Sections 11, 48, and 52 of RA 9136 Petitioner argues that Sections 11,[27] 48,[28] and 52[29] of the EPIRA are unconstitutional for violating Section 13, Article VII of the 1987 Constitution. Section 13, Article VII of the 1987 Constitution provides:

Sec. 13. The President, Vice-President, the Members of the Cabinet, and their deputies or assistants shall not, unless otherwise provided in this Constitution, hold any other office or employment during their tenure. They shall not, during said tenure, directly or indirectly practice any other profession, participate in any business, or be financially interested in any contract with, or in any franchise, or special privilege granted by the Government or any subdivision, agency, or instrumentality thereof, including government-owned or controlled corporations or their subsidiaries. They shall strictly avoid conflict of interest in the conduct of their office. x x x x.[30] In Civil Liberties Union v. Executive Secretary,[31] this Court explained that the prohibition contained in Section 13, Article VII of the 1987 Constitution does not apply to posts occupied by the Executive officials specified therein without additional compensation in an ex-officio capacity as provided by law and as required by the primary function of said official's office, to wit: The prohibition against holding dual or multiple offices or employment under Section 13, Article VII of the Constitution must not, however, be construed as applying to posts occupied by the Executive officials specified therein without additional compensation in an ex-officio capacity as provided by law and as required by the primary functions of said officials' office. The reason is that these posts do not comprise "any other office" within the contemplation of the constitutional prohibition but are properly an imposition of additional duties and functions on said officials. To characterize these posts otherwise would lead to absurd consequences, among which are: The President of the Philippines cannot chair the National Security Council reorganized under Executive Order No. 115 (December 24, 1986). Neither can the Vice-President, the Executive Secretary, and the Secretaries of National Defence, Justice, Labor and Employment and Local Government sit in this Council, which would then have no reason to exist for lack of a chairperson and members. The respective undersecretaries and assistant secretaries, would also be prohibited. xxxx The term "primary" used to describe "functions" refers to the order of importance and thus means chief or principal function. The term is not restricted to the singular but may refer to the plural. The additional duties must not only be closely related to, but must be required by the official's primary functions. Examples of designations to positions by virtue of one's primary functions are the Secretaries of Finance and Budget, sitting as members of the Monetary Board, and the Secretary of Transportation and Communications, acting as Chairman of the Maritime Industry Authority and the Civil Aeronautics Board.[32] The designation of the members of the Cabinet to form the NPB does not violate the prohibition contained in our Constitution as the privatization and restructuring of the electric power industry involves the close coordination and policy determination of various government agencies. Section 2 of the EPIRA clearly shows that the policy toward privatization would involve financial, budgetary and environmental concerns as well as coordination with local government units, to wit: SECTION 2. Declaration of Policy. - It is hereby declared the policy of the State: (a) To ensure and accelerate the total electrification of the country; (b) To ensure the quality, reliability, security and affordability of the supply of electric power; (c) To ensure transparent and reasonable prices of electricity in a regime of free and fair competition and full public accountability to achieve greater operational and economic efficiency and enhance the competitiveness of Philippine products in the global market; (d) To enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors; (e) To ensure fair and non-discriminatory treatment of public and private sector entities in the process of restructuring the electric power industry; (f) To protect the public interest as it is affected by the rates and services of electric utilities and other providers of electric power; (g) To assure socially and environmentally compatible energy sources and infrastructure;

(h) To promote the utilization of indigenous and new and renewable energy resources in power generation in order to reduce dependence on imported energy; (i) To provide for an orderly and transparent privatization of the assets and liabilities of the National Power Corporation (NPC); (j) To establish a strong and purely independent regulatory body and system to ensure consumer protection and enhance the competitive operation of the electricity market; and (k) To encourage the efficient use of energy and other modalities of demand side management. As can be gleaned from the foregoing enumeration, the restructuring of the electric power industry inherently involves the participation of various government agencies. In Civil Liberties, this Court explained that mandating additional duties and functions to Cabinet members which are not inconsistent with those already prescribed by their offices or appointments by virtue of their special knowledge, expertise and skill in their respective executive offices, is a practice long-recognized in many jurisdictions. It is a practice justified by the demands of efficiency, policy direction, continuity and coordination among the different offices in the Executive Branch in the discharge of its multifarious tasks of executing and implementing laws affecting national interest and general welfare and delivering basic services to the people.[33] The production and supply of energy is undoubtedly one of national interest and is a basic commodity expected by the people. This Court, therefore, finds the designation of the respective members of the Cabinet, as ex-officio members of the NPB, valid. This Court is not unmindful, however, that Section 48 of the EPIRA is not categorical in proclaiming that the concerned Cabinet secretaries compose the NPB Board only in an ex-officio capacity. It is only in Section 52 creating the Power Sector Assets and Liabilities Management Corporation (PSALM) that they are so designated in an ex-officio capacity. Sections 4 and 6 of the EPIRA provides: Section 4. TRANSCO Board of Directors. All the powers of the TRANSCO shall be vested in and exercised by a Board of Directors. The Board shall be composed of a Chairman and six (6) members. The Secretary of the DOF shall be the ex-officio Chairman of the Board. The other members of the TRANSCO Board shall include the Secretary of the DOE, the Secretary of the DENR, the President of TRANSCO, and three (3) members to be appointed by the President of the Philippines, each representing Luzon, Visayas and Mindanao, one of whom shall be the President of PSALM. x x x x. Section 6. PSALM Board of Directors. PSALM shall be administered, and its powers and functions exercised, by a Board of Directors which shall be composed of the Secretary of the DOF as the Chairman, and the Secretary of the DOE, the Secretary of the DBM, the Director-General of the NEDA, the Secretary of the DOJ, the Secretary of the DTI and the President of the PSALM as ex-officio members thereof. Nonetheless, this Court agrees with the contention of the Solicitor General that the constitutional prohibition was not violated, considering that the concerned Cabinet secretaries were merely imposed additional duties and their posts in the NPB do not constitute "any other office" within the contemplation of the constitutional prohibition. The delegation of the said official to the respective Board of Directors were designation by Congress of additional functions and duties to the officials concerned, i.e., they were designated as members of the Board of Directors. Designation connotes an imposition of additional duties, usually by law, upon a person already in the public service by virtue of an earlier appointment.[34] Designation does not entail payment of additional benefits or grant upon the person so designated the right to claim the salary attached to the position. Without an appointment, a designation does not entitle the officer to receive the salary of the position. The legal basis of an employee's right to claim the salary attached thereto is a duly issued and approved appointment to the position, and not a mere designation.[35] Hence, Congress specifically intended that the position of member of the Board of NPB shall be ex-officio or automatically attached to the respective offices of the members composing the board. It is clear from the wordings of the law that it was the intention of Congress that the subject posts will be adjunct to the respective offices of the official designated to such posts.

The foregoing discussion, notwithstanding, the concerned officials should not receive any additional compensation pursuant to their designation as ruled in Civil Liberties, thus: The ex-officio position being actually and in legal contemplation part of the principal office, it follows that the official concerned has no right to receive additional compensation for his services in the said position. The reason is that these services are already paid for and covered by the compensation attached to his principal office. It should be obvious that if, say, the Secretary of Finance attends a meeting of the Monetary Board as an ex-officio member thereof, he is actually and in legal contemplation performing the primary function of his principal office in defining policy in monetary and banking matters, which come under the jurisdiction of his department. For such attendance, therefore, he is not entitled to collect any extra compensation, whether it be in the form of a per diem or an honorarium or an allowance, or some other such euphemism. By whatever name it is designated, such additional compensation is prohibited by the Constitution. In relation thereto, Section 14 of the EPIRA provides: SEC. 14. Board Per Diems and Allowances. - The members of the Board shall receive per diem for each regular or special meeting of the board actually attended by them and, upon approval of the Secretary of the Department of Finance, such other allowances as the Board may prescribe. Section 14 relates to Section 11 which sets the composition of the TRANSCO Board naming the Secretary of the Department of Finance as the ex officio Chairman of the Board. The other members of the TRANSCO Board include the Secretary of the Department of Energy and the Secretary of the Department of Environment and Natural Resources. However, considering the constitutional prohibition, it is clear that such emoluments or additional compensation to be received by the members of the NPB do not apply and should not be received by those covered by the constitutional prohibition, i.e., the Cabinet secretaries. It is to be noted that three of the members of the NPB are to be appointed by the President, who would be representing the interests of those in Luzon, Visayas, and Mindanao, who may be entitled to such honorarium or allowance if they do not fall within the constitutional prohibition. Hence, the said cabinet officials cannot receive any form of additional compensation by way of per diems and allowances. Moreover, any amount received by them in their capacity as members of the Board of Directors should be reimbursed to the government, since they are prohibited from collecting additional compensation by the Constitution. These interpretations are consistent with the fundamental rule of statutory construction that a statute is to be read in a manner that would breathe life into it, rather than defeat it, [36] and is supported by the criteria in cases of this nature that all reasonable doubts should be resolved in favor of the constitutionality of a statute.[37] Constitutionality of Section 34[38] of the EPIRA The Constitutionality of Section 34 of the EPIRA has already been passed upon by this Court in Gerochi v. Department of Energy,[39] to wit: Finally, every law has in its favor the presumption of constitutionality, and to justify its nullification, there must be a clear and unequivocal breach of the Constitution and not one that is doubtful, speculative, or argumentative. Indubitably, petitioners failed to overcome this presumption in favor of the EPIRA. We find no clear violation of the Constitution which would warrant a pronouncement that Sec. 34 of the EPIRA and Rule 18 of its IRR are unconstitutional and void.[40] In Gerochi, this Court ruled that the Universal Charge is not a tax but an exaction in the exercise of the State's police power. The Universal Charge is imposed to ensure the viability of the country's electric power industry. Petitioner argues that the imposition of a universal charge to address the stranded debts and contract made by the government through the NCC-IPP contracts or Power Utility-IPP contracts or simply the bilateral agreements or contracts is an added burden to the electricity-consuming public on their monthly power bills. It would mean that the electricity-consuming public will suffer in carrying this burden for the errors committed by those in power who runs the affairs of the State. This is an exorbitant display of State Power at the expense of its people.[41]

It is basic that the determination of whether or not a tax is excessive oppressive or confiscatory is an issue which essentially involves a question of fact and, thus, this Court is precluded from reviewing the same. Validity of Section 38[42] of the EPIRA Petitioner argues that the abolishment of the ERB and its replacement of a very powerful quasi-judicial body named the Energy Regulatory Commission (ERC), pursuant to Section 38 up to Section 43 of the EPIRA or RA 9136, which is tasked to dictate the day-to-day affairs of the entire electric power industry, seems a prelude to Charter Change. Petitioner submits that under the 1987 Constitution, there are only three constitutionally-recognized Commissions, they are: the Civil Service Commission (CSC), the Commission on Audit (COA) and the Commission on Elections (COMELEC).[43] Petitioner's argument that the creation of the ERC seems to be a prelude to charter change is flimsy and finds no support in law. This Court cannot subscribe to petitioner's thesis that "in order for the newly-enacted RA 9136 or EPIRA to become a valid law, we should have to call first a referendum to amend or totally change the People's Charter."[44] In any case, the constitutionality of the abolition of the ERB and the creation of the ERC has already been settled in Kapisanan ng mga Kawani ng Energy Regulatory Board v. Commissioner Fe Barin,[45] to wit: All laws enjoy the presumption of constitutionality. To justify the nullification of a law, there must be a clear and unequivocal breach of the Constitution. KERB failed to show any breach of the Constitution. A public office is created by the Constitution or by law or by an officer or tribunal to which the power to create the office has been delegated by the legislature. The power to create an office carries with it the power to abolish. President Corazon C. Aquino, then exercising her legislative powers, created the ERB by issuing Executive Order No. 172 on 8 May 1987. The question of whether a law abolishes an office is a question of legislative intent. There should not be any controversy if there is an explicit declaration of abolition in the law itself. Section 38 of RA 9136 explicitly abolished the ERB. x x x[46] Moreover, in Kapisanan, this Court ruled that because of the expansion of the ERC's functions and concerns, there was a valid abolition of the ERB.[47] Validity of Section 63[48] Contrary to petitioner's argument, Section 63 of the EPIRA and Section 33 of the IRR of the EPIRA did not impair the vested rights of NPC personnel to claim benefits under existing laws. Neither does the EPIRA cut short the years of service of the employees concerned. If an employee availed of the separation pay and other benefits in accordance with existing laws or the superior separation pay under the NPC restructuring plan, it is but logical that those who availed of such privilege will start their government service anew if they will later be employed by any government-owned successor company or government instrumentality. It is to be noted that this Court ruled in the case of Herrera v. National Power Corporation, [49] that Section 63 of the EPIRA precluded the receipt by the terminated employee of both separation and retirement benefits under the Government Service Insurance System (GSIS) organic law, or Commonwealth Act (C.A.) No. 186. [50] However, it must be clarified that this Court's pronouncements in Herrera that separated and retired employees of the NPC "are not entitled to receive retirement benefits under C.A. No. 186," referred only to the gratuity benefits granted by R.A. No. 1616, [51] which was to be paid by NPC as the last employer. It did not proscribe the payment of retirement benefits to qualified retirees under R.A. No. 660, [52] Presidential Decree (P.D.) No. 1146, [53] R.A. No. 8291, [54] and other GSIS and social security laws. The factual and procedural antecedents of Herrera reveal that it arose from a case between NPC and several of its separated employees who were asking additional benefits from NPC under R.A. No. 1616 after receiving from the former separation benefits under Section 63 of R.A. No. 9136.

Unable to resolve the issue with its former employees amicably, NPC filed a petition for declaratory relief, docketed as Civil Case SCA No. Q-03-50681, [55] before the Regional Trial Court of Quezon City, raising the issue of whether or not the employees of NPC are entitled to receive retirement benefits under R.A. No. 1616 over and above the separation benefits granted by R.A. No. 9136. [56] Under R.A. No. 1616, a gratuity benefit is given to qualified retiring members of the GSIS, which is payable by the last employer. In addition to said gratuity benefits, the qualified employee shall also be entitled to a refund of retirement premiums paid, consisting of personal contributions of the employee plus interest, and government share without interest, payable by the GSIS. It effectively amended Section 12 (c) of C.A. No. 186, as follows: (c) Retirement is likewise allowed to any official or employee, appointive or elective, regardless of age and employment status, who has rendered a total of at least twenty years of service, the last three years of which are continuous. The benefit shall, in addition to the return of his personal contributions with interest compounded monthly and the payment of the corresponding employer's premiums described in subsection (a) of Section five hereof, without interest, be only a gratuity equivalent to one month's salary for every year of the first twenty years of service, plus one and one-half months' salary for every year of service over twenty but below thirty years and two months' salary for every year of service over thirty years in case of employees based on the highest rate received and in case of elected officials on the rates of pay as provided by law. This gratuity is payable on the rates of pay as provided by law. This gratuity is payable by the employer or officer concerned which is hereby authorized to provide the necessary appropriation or pay the same from any unexpended items of appropriations or savings in its appropriations. Officials and employees retired under this Act shall be entitled to the commutation of the unused vacation and sick leave, based on the highest rate received, which they may have to their credit at the time of retirement. x x x [57] (Emphasis supplied.) After trial, the RTC rendered a Decision ruling against the NPC employees, the decretal portion of which reads: WHEREFORE, premises considered, Republic Act No. 9136 DID NOT SPECIFICALLY AUTHORIZE the National Power Corporation to grant retirement benefits under Republic Act No. 1616 in addition to separation pay under Republic Act No. 9136. SO ORDERED. [58] Petitioners therein then sought recourse directly to this Court on a pure question of law. In the preparatory statement of the Petition for Review on Certiorari, [59] it is apparent that the case was limited only to the interpretation of Section 63 of R.A. No. 9136, in relation to R.A. No. 1616, on the matter of retirement benefits, to wit: This is a case of first impression limited to the interpretation of Section 63, R.A. 9136 (EPIRA), granting separation pay to terminated NAPOCOR employees, in relation to R.A. 1616, on the matter of retirement benefits. Respondents NAPOCOR and DEPARTMENT OF BUDGET AND MANAGEMENT erroneously contend that the entitlement to the separation pay under R.A. 9136 forfeits the retirement benefit under R.A. 1616. Petitioners most respectfully submit that since R.A. 9136 and R.A. 1616 are not inconsistent with each other and they have distinct noble purposes, entitlement to separation pay will not disqualify the separated employee who is qualified to retire from receiving retirement benefits allowed under another law. x x x[60] However, in the Decision dated December 18, 2009, it was held that petitioners therein were not only entitled to receive retirement benefits under R.A. No. 1616 but also were "not entitled to receive retirement benefits under Commonwealth Act No. 186, as amended," which, in effect, might lead to the conclusion that the declaration encompassed all other benefits granted by C.A. No. 186 to its qualified members. In relation to R.A. No. 1616, Herrera should have affected only the payment of gratuity benefits by NPC, being the last employer, to its separated employees. It was even categorically stated that petitioners therein were "entitled to a refund of their contributions to the retirement fund, and the monetary value of any accumulated vacation and sick leaves," [61] which is clearly congruous to the mandate of R.A. No. 1616. The matter of availment of retirement benefits of qualified employees under any other law to be paid by the GSIS should not and was not covered by the decision. In the first place, it was never an issue. In the case of Santos v. Servier Philippines, Inc., [62] citing Aquino v. National Labor Relations Commission, [63] We declared that the receipt of retirement benefits does not bar the retiree from receiving separation pay. Separation pay is a statutory

right designed to provide the employee with the wherewithal during the period that he/she is looking for another employment. On the other hand, retirement benefits are intended to help the employee enjoy the remaining years of his life, lessening the burden of worrying about his financial support, and are a form of reward for his loyalty and service to the employer. A separation pay is given during one's employable years, while retirement benefits are given during one's unemployable years. Hence, they are not mutually exclusive. [64] Even in the deliberations of Congress during the passage of R.A. No. 9136, it was manifest that it was not the intention of the law to infringe upon the vested rights of NPC personnel to claim benefits under existing laws. To assure the worried and uneasy NPC employees, Congress guaranteed their entitlement to a separation pay to tide them over in the meantime. [65] More importantly, to further allay the fears of the NPC employees, especially those who were nearing retirement age, Congress repeatedly assured them in several public and congressional hearings that on top of their separation benefits, they would still receive their retirement benefits, as long as they would qualify and meet the requirements for its entitlement. The transcripts of the Public Consultative Meeting on the Power Bill held on February 16, 2001, disclose the following: xxxx THE CHAIRMAN (SEN. J. OSMENA). Well, the other labor representation here is Mr. Anguluan. MR. ANGULUAN: Yes, Your Honor. THE CHAIRMAN (SEN. J. OSMENA). Okay. Will you present your paper? MR. ANGULUAN: We have prepared a paper which we have sent to the honorable members of the Bicam. x x x. THE CHAIRMAN (SEN. J. OSMENA). I don't think anyone is going to deprive you of your rights under the law. You will enjoy all your rights. You will receive retirement benefits, separation pay, and all of the rights that are provided to you by law. What we have objected to in the Senate is retirement benefits higher than what everybody else gets, like 150 percent or subject to the approval of the board which means sky is the limit. So, we have objected to that. But what you are entitled to under the law, you will get under the law and nobody will deprive you of that. [66] A year later, on February 12, 2002, the Joint Congressional Power Commission was held. The transcripts of the hearing bare the following: xxxx THE CHAIRMAN (REP. BADELLES). They will still be subject to the same conditions. Meaning, NPC has the discretion whether to reabsorb or hire back those that avail of the separation benefits. SEN. OSMENA (J). No. But they are not being - - the plants are not being sold, so they are - but what we are giving them is a special concession of retiring early. No, okay. You consider . . . THE CHAIRMAN (REP. BADELLES). We are not speaking of retirement here, we are speaking of their separation benefits . . . SEN. OSMENA (J). Okay, separation benefits. THE CHAIRMAN (REP. BADELLES). Precisely, if they are considered terminated. SEN. OSMENA (J). All right. Separation . . . THE CHAIRMAN (REP. BADELLES). A retirement plan is a different program than separation. SEN. OSMENA (J). Separation benefits, okay.

THE CHAIRMAN (REP. BADELLES). All right. [67] Thus, it is clear that a separation pay at the time of the reorganization of the NPC and retirement benefits at the appropriate future time are two separate and distinct entitlements. Stated otherwise, a retirement plan is a different program from a separation package. There is a whale of a difference between R.A. No. 1616 and C.A. No. 186, together with its amendatory laws. They have different legal bases, different sources of funds and differentintents. In R.A. No. 1616, which is the subject issue in Herrera, the retirees are entitled to gratuity benefits to be paid by the last employer and refund of premiums to be paid by the GSIS. On the other hand, retirement benefits under C.A. No. 186, as amended by R.A. No. 8291, are to be paid by the GSIS. Stated otherwise, under R.A. No. 1616, what would be paid by the last employer, NPC, would be gratuity benefits, and GSIS would merely refund the retirement premiums consisting of personal contributions of the employee plus interest, and the employer's share without interest. Under C.A. No. 186, as amended, it is the GSIS who would pay the qualified employees their retirement benefits. Indeed, with several amendments to C.A. No. 186,[68] the Court finds it necessary to clarify Herrera and categorically declare that it affected only those seeking benefits under R.A. No. 1616. [69] It could not have meant to affect those employees who retired, and who will retire, under the different amendatory laws of C.A. No. 186 like R.A. No. 660, [70] P.D. No. 1146 [71] and R.A. No. 8291. [72] At any rate, entitlement of qualified employees to receive separation pay and retirement benefits is not proscribed by the 1987 Constitution. Section 8 of Article IX (B) of the 1987 Constitution reads: SEC. 8. No elective or appointive public officer or employee shall receive additional, double or indirect compensation, unless specifically authorized by law, nor accept without the consent of the Congress, any present, emolument, office, or title of any kind from any foreign government. Pensions or gratuities shall not be considered as additional, double, or indirect compensation. [73] Moreover, retirement benefits under C.A. No. 186 are not even considered as compensation. Section 2 (e) of C.A. No. 186 categorically states that ? Benefits granted by this Act by virtue of such life or retirement insurance shall not be considered as compensation or emolument. [74] Under the GSIS law, the retired employees earned their vested right under their contract of insurance after they religiously paid premiums to GSIS. Under the contract, GSIS is bound to pay the retirement benefits as it received the premiums from the employees and NPC. In Marasigan v. Cruz, [75] this Court ratiocinated that: A retirement law such as C.A. 186 and amendatory laws is in the nature of a contract between the government and its employees. When an employee joins the government service, he has a right to expect that after rendering the required length of service and fulfilled the conditions stated in the laws on retirement, he would be able to enjoy the benefits provided in said laws. He regularly pays the dues prescribed therefore. It would be cruel to deny him the benefits he had been expecting at the end of his service by imposing conditions for his retirement, which are not found in the law. It is believed to be a legal duty as well as a moral obligation on the part of the government to honor its commitments to its employees when as in this case, they have met all the conditions prescribed by law and are therefore entitled to receive their retirement benefits. [76] Thus, where the employee retires and meets the eligibility requirements, he acquires a vested right to benefits that is protected by the due process clause. Retirees enjoy a protected property interest whenever they acquire a right to immediate payment under pre-existing law. Thus, a pensioner acquires a vested right to benefits that have become due as provided under the terms of the public employees' pension statute. No law can deprive such person of his pension rights without due process

of law, that is, without notice and opportunity to be heard. [77] Verily, when an employee has complied with the statutory requirements to be entitled to receive his retirement benefits, his right to retire and receive what is due him by virtue thereof becomes vested and may not thereafter be revoked or impaired. Moreover, Section 63 of the EPIRA law, if misinterpreted as proscribing payment of retirement benefits under the GSIS law, would be unconstitutional as it would be violative of Section 10, Article III of the 1987 Constitution [78] or the provision on non-impairment of contracts. In view of the fact that separation pay and retirement benefits are different entitlements, as they have different legal bases, different sources of funds, and different intents, the "exclusiveness of benefits" rule provided under R.A. No. 8291 is not applicable. Section 55 of R.A. No. 8291 states: "Whenever other laws provide similar benefits for the same contingencies covered by this Act, the member who qualifies to the benefits shall have the option to choose which benefits will be paid to him." Accordingly, the Court declares that separated, displaced, retiring, and retired employees of NPC are legally entitled to the retirement benefits pursuant to the intent of Congress and as guaranteed by the GSIS laws. Thus, the Court reiterates: 1] that the dispositive portion in Herrera holding that separated and retired employees "are not entitled to receive retirement benefits under Commonwealth Act No. 186," referred only to the gratuity benefits under R.A. No. 1616, which was to be paid by NPC, being the last employer; 2] that it did not proscribe the payment of the retirement benefits to qualified retirees under R.A. No. 660, P.D. No. 1146, R.A. No. 8291, and other GSIS and social security laws; and 3] that separated, rehired, retiring, and retired employees should receive, and continue to receive, the retirement benefits to which they are legally entitled. Petition for Mandamus As for petitioner's prayer that he be reinstated, suffice it to state that the issue has been rendered moot by the Decision and Resolutions of this Court in the case of NPC Drivers and Mechanics Association (NPC DAMA) v. National Power Corporation (NPC)[79] and by the above disquisitions. In Conclusion While we commend petitioner's attempt to argue against the privatization of the NPC, it is not the proper subject of herein petition. Petitioner belabored on alleging facts to prove his point which, however, go into policy decisions which this Court must not delve into less we violate separation of powers. The wisdom of the privatization of the NPC cannot be looked into by this Court as it would certainly violate this guarded principle. The wisdom and propriety of legislation is not for this Court to pass upon.[80] Every law has in its favor the presumption of constitutionality, and to justify its nullification, there must be a clear and unequivocal breach of the Constitution, and not one that is doubtful, speculative or argumentative.[81] As in National Power Corporation Employees Consolidated Union (NECU) v. National Power Corporation (NPC),[82] this Court held: Whether the State's policy of privatizing the electric power industry is wise, just, or expedient is not for this Court to decide. The formulation of State policy is a legislative concern. Hence, the primary judge of the necessity, adequacy, wisdom, reasonableness and expediency of any law is primarily the function of the legislature.[83] WHEREFORE, premises considered and subject to the above disquisitions, the Petition for Certiorari and the Supplemental Petition for Mandamus are Dismissed for lack of merit. SO ORDERED.